Capital Gains and Losses

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I have a rental house, and noticed it has not been getting…

I have a rental house...
I have a rental house, and noticed it has not been getting depreciated on prior years tax returns. If the house is sold in 2018, will it be possible to deduct all the missed depreciation from prior years on the 2018 1040, lowering the tax liability on the sale?
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Answered in 19 minutes by:
11/19/2017
levr
levr, Tax Advisor
Category: Capital Gains and Losses
Satisfied Customers: 33,125
Experience: Working for a large tax preparation service
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You can get automatic approval from the IRS to change the method of accounting for depreciation under Rev. Proc. 2011-14.

You can recoup missed or understated allowable depreciation from open and closed years using this revenue procedure, and the approval is automatic, thus - there is no any additional fee.

With your tax return - you must file Form 3115, Application for Change in Accounting Method, to request a change in your method of accounting for depreciation.

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Customer reply replied 8 months ago
Would this affect accounting method (accrual vs cash) for sole proprietors who are filing schedule c?
Customer reply replied 8 months ago
didn't it get revised to Rev. Proc. 2015-13 and Rev. Proc. 2015-14?

Form 3115 may be used for different purposes.

Specifically - a change in method of accounting occurs when it affects a single item.

That specific change will not affect your overall accounting method.

You are correct - we need to use revised Revenue Procedures you mentioned.

levr
levr, Tax Advisor
Category: Capital Gains and Losses
Satisfied Customers: 33,125
Experience: Working for a large tax preparation service
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Customer reply replied 8 months ago
ok, thanks
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