Rental house not depreciated after 5 years, Please help !!!!!!!?

Question

I purchased my house 14 years ago for $100,000 , 4 1/2 years ago i decided to rent it out, but now after all this time I learned i could have been depreciating the value of the home.
If someone could Please tell me when i calculate the depreciated value will it be for purchase price 14 years ago or value as of four years ago (160,000) ? also how do I find the House value minus land value ? And if i amend taxes for the past three years , will i have to amend for each year separately or once for all years ?

Answer 1

you will have to start depreciation with the value that you bought it for; the land value should be included in the papers that you received when you bought the house, if you can't find it there, you can get the info at your city hall

as far as the amended returns; you need to amend each one seperately
you can amend 2003 return until April 17th this year; after that you won't be able to do it
2004 has to be amended before April 15th, 2008
2005 has to be amended before April 15th, 2009

Answer 2

You depreciate the original value of the home plus improvements. This assumes that your investment in the home is in fact less than $160,000.

If you have made no improvements (or taken casualty losses) on the home, then the basis for depreciation is $100,000 less the cost of the land. You can figure the cost of the land based on nearby lots for sale. A safe figure is 15 - 20% of the value of the property. So you would depreciate, say, $80,000 over 27.5 years, or something close to $3,000 a year except for the first year, which is prorated by months.


You should amend 2002, 2003, 2004, 2005 and take the depreciation. Each year is done separately.

Although you will not get a refund for 2002, you should amend it anyway since the numbers from the 2002 return will carry over to the 2003 return.

You may get refunds for 2003, 2004, and 2005. It is not likely that you will owe tax on the amendments, since you are taking a deduction.

Answer 3

The basis for depreciation is the lesser of:

The fair market value of the property on the date you changed it to rental use, or

Your adjusted basis on the date of the change—that is, your original cost or other basis of the property, plus the cost of permanent additions or improvements since you acquired it, minus deductions for any casualty or theft losses claimed on earlier years' income tax returns and other decreases to basis.

The land value can be found by looking at your yearly property tax statement. Where I live, you can go on your tax assessors web site or call the office for the amount.

I'm not 100%, but I'm fairly certain that you have to ammend for each year.

The source shows all the rules of rental property and it has an example that is almost exactly like what you've described. I've attached it below.

Example.

Several years ago you built your home for $140,000 on a lot that cost you $14,000. Before changing the property to rental use last year, you added $28,000 of permanent improvements to the house and claimed a $3,500 deduction for a casualty loss to the house. Because land is not depreciable, you can only include the cost of the house when figuring the basis for depreciation.

The adjusted basis of the house at the time of the change in use was $164,500 ($140,000 + $28,000 - $3,500).

On the date of the change in use, your property had a fair market value of $168,000, of which $21,000 was for the land and $147,000 was for the house.

The basis for depreciation on the house is the fair market value at the date of the change ($147,000), because it is less than your adjusted basis ($164,500).

Answer 4

The other answer is correct. As to the land value look at assessed vales for real estate taxes. If the assessed land value is 30% of total value take 30% of original cost as land value.

Answer 5

i think of what you assert is this: I lived in a house for 6 years and when I moved out- I saved it and became it right into a condo abode. If that's what you assert then you certainly now ought to get marvelous tax suggestion- in individual. looking on how long you have rented it out you'll be approximately to lose some very efficient economic reward. certainly in case you will shop it as a lease abode you ought to take great element approximately each probability- I only am not sure you're happening the neatest course.