Bilgerat
Level 2

Husband and wife placed rental property into service in 2011 and stopped renting in 2018.  Husband was too ill to deal with new renters and they decided to let it sit empty.  Husband passed away in 2021 and rental house was sold by wife in 2022.  They did not try to rent it but also did not use it personally.  It was never their principal residence.  Previous tax preparer stopped depreciation and recording expenses on sched e at the end of 2018.  I have the old depreciation schedule and can come up with allowed, allowable depreciation.  The surviving wife has an appraisal as of the date of death and I am stepping up her half of basis (non-community property state).  With the increase in basis it will be a loss situation unless no loss allowed.  So, would this be a regular sale of rental property with losses run through 4797? or  Sale of investment property with capital loss limited to 3K? or Sale of 2nd home with no loss allowed?  I keep going around and around on this one.  Thanks.

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