Is residential rental property depreciation subject to the AMT depreciation adjustment?

It depends on the year you placed the property in service. If you placed the property in service after 1998, you don’t have to make an Alternative Minimum Tax (AMT) depreciation adjustment on the home itself. However, AMT depreciation rates may apply if both of these are true:

  • You separately depreciate items you used in a residential real estate activity, like:
    • Appliances
    • Carpet
    • Furniture
  • You use the 200% declining balance method.

To learn more, see the instructions for Form 6251.

You might not need to adjust depreciation. However, you might need to make a passive-activity adjustment. Make that adjustment on Form 6251.

  

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