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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?
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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.
Here's wishing you many Happy Returns
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I would have the client decide whether to go back to prior preparer to have it done and possibly pay any penalties or interest involved in additional tax due OR pay you to correct the errors and do the amended.
Here's wishing you many Happy Returns
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