Rental Property Depreciation

Forum|Forum|3 years ago
March 10, 2023
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I have a single family residence that I purchased for rental investment back in 2003. Over the 20yrs I've owned it, I have only taken depreciation during the yrs that the property was rented to tenants (12 of 20yrs). I placed it back into service in 2022 after not renting it for the prior 3yrs.

1) Do I manually re-enter the depreciation schedule in TurboTax (picking up @ the 13th yr's depreciation balance).

2) I also made improvements in 2022 (new HVAC, Water Heater, and Electrical Rewiring). Do I began new depreciation schedules for these items?

Thank you.

TurboTax Home & Biz Windows

Best answer by Anonymous_

When you place the property back into service for rental use, the 27.5-year recovery period starts over from the year the property is placed into service.

You will use the lower of your adjusted basis or the fair market value on the date of the conversion to rental use as your new basis for depreciation. Since it is likely that your adjusted basis (which would be your cost basis less accumulated depreciation deductions plus improvements) would be lower than the fair market value, you would use your adjusted basis as the basis for depreciation.

Anonymous_Answer

Employee

When you place the property back into service for rental use, the 27.5-year recovery period starts over from the year the property is placed into service.