Incorrect cost basis on rental property

Forum|Forum|3 years ago
December 29, 2022
1 reply
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I just discovered that I entered the wrong cost basis when filing my first year on rental property. I lived in the property for 7 years before converting it to a rental. I entered the purchase price NOT the FMV at the time of entering as a rental and the wrong date, 2014 should be 2017. I have prepared amended returns, including correcting the depreciation, for 2020 and 2021. This will actually refund me money, minimal. I am more concerned about it triggering an audit. ?

AmeliesUncle

@SRI64 wrote:
I entered the purchase price NOT the FMV at the time of entering as a rental

Was the FMV lower than the purchase price? If not, you don't use the FMV.

Depreciation is based on the LOWER of (a) Adjusted Basis when converted to a rental or (b) the FMV when converted to a rental.

SRI64Author

Thank you for your response. No FMV is higher, much. Afraid the error will be a problem when I sell. I was amending my cost from what I paid, to FMV at time of entering into a rental, 43,000 to 110,000