Depreciation on an asset purchased and sold in the same year

Forum|Forum|4 months ago
February 21, 2026
2 replies
23 views

Didn't Lacerte used to disallow depreciation on an asset when it was purchased and sold in the same year? I have an inherited rental property that was placed in service at date of death and sold in the same year and it is allowing depreciation on the building.

Lacerte Tax

T

TaxGuyBill

Level 15

I don't know what Lacerte used to do, but ProSeries has disallowed depreciation on non-real estate, but has allowed depreciation on real estate.

While I formerly suspected depreciation on real estate was allowed when it was disposed in the same year, I found something that changed my mind and I no longer believe it is allowed.

K

Kathleen1Author

Level 5

Appreciate the confirmation. I was thinking because of the mid month convention you could. But everything I read says no. So I forced it to zero. Thanks.

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TaxGuyBill

Level 15

@Kathleen1 wrote:

I was thinking because of the mid month convention you could.

That is what had previously made me think it was allowed. There is a Regulation that says Half-Year and Mid-Quarter can't claim depreciation in when it is disposed in the same year that it was placed in service, so the implication was that Mid-Month could do it.

But I recently found something that indicated it was not allowed (I don't remember exactly where or what it said though).

BobKamman

Level 15

Does "inherited" override the date placed in service? Has that even been entered? Are you showing it as long term for the sale? Was there a probate and a 1041 filed for the period from date of death to date of distribution? Was it a rental when the decedent owned it? Does any of this really make a difference?

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Kathleen1Author

Level 5

Whether inherited changes things is a good question. We are showing it as a long term sale. But in this case I guess, six of one, half a dozen of the other. The sale is a loss and ordinary since it's a rental. Is was a rental before and after death. So either way I have an NOL, whether it comes from lower net income on the rental and lower loss on the sale, or vice versa.

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