Higher basis used for calculating depreciation for 2017 and 2018 on residential rental property.

Forum|Forum|6 years ago
December 7, 2019
1 reply
10 views

Higher basis used for calculating depreciation for 2017 and 2018 on residential rental property on individual tax return. Losses allowed in both years. Taxpayer will be selling property in 2019 and does not meet the residency test. Do I have to amend past years or can I lower the basis and include all depreciation taken to calculate gain on 2019 return and include a statement disclosing the adjustment on the return when it is filed?

Lacerte Tax

This topic has been closed for replies.

Best answer by George4Tacks

Are you stating that the basis shown on 2017 and 2018 was higher than the correct basis for the property? Was the property converted from residential to rental? Was Land allocated to the basis?

I think the answer to your question is to amend the returns, since they are still open years.

George4TacksAnswer

Level 15

Are you stating that the basis shown on 2017 and 2018 was higher than the correct basis for the property? Was the property converted from residential to rental? Was Land allocated to the basis?

I think the answer to your question is to amend the returns, since they are still open years.

Answers are easy. Questions are hard!

P

pat11Author

Level 5

Yes, the basis was tripled in 2017/2018 due to the Source field on a multi-state return not proforma'ing from 2016 to 2017 and Lacerte tripling the value. The previous tax preparer for TYs 2017 and 2018 did not notice the high value on the depreciation schedule. Be aware of this in Lacerte - the Source does not proforma and the values sourced then become the cumulative amount.

Sign up

Login with SSO

Let's get you signed in

Login with SSO