Question

Depreciation assets of rental

Forum|Forum|4 years ago
April 10, 2022
1 reply
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@we100_2 converted a home purchased in 1995 to a rental in 2016. How do I claim all of the improvements that

were made prior to and after the home became a rental. I bought for $105,000, and sold it in 2021 for $532,000.

TurboTax Live Premier Online

You would add all improvements to the basis before you converted it. Ideally, you already did this when you started renting. Any improvement after you started renting would have its own asset depreciation and should have been depreciated since being placed in service.

W

warren0788Author

Am I adding the improvements done before making the property a rental under expenses. I am thinking I missed a section. I selected that I sold an investment property in 2021. I just don't see where the prior improvements should be listed.

Carl11_2

Employee

I selected that I sold an investment property in 2021.

If you sold the property in 2021 and you have not been depreciating your property improvements done before and after converting it to a rental in 2016, then you have a major issue the program can not deal with. You need to seek professional help. This is especially true if your state taxes personal income.

Basically, a 3115-Change in Accounting Method form will need to be filed with your tax return to account for all that depreciation you did not take when you were required to.

Now while the program does include the 3115, it is not simple by any stretch and the program offers practically no help for that form. Unless you are well versed on dealing with this, professional help is needed.