Question

I have a tax question about catch-up depreciation. I have owned a rental property for 10 years but have never claimed depreciation on rental property, can I claim it now?

Answer

Yes, you should claim depreciation on rental property. You should claim catch-up depreciation on this year’s return. Catch-up depreciation is an adjustment to correct improper depreciation. This occurs when:

  • You didn’t claim depreciation in prior years on a depreciable asset.
  • You claimed more or less than the allowable depreciation on a depreciable asset.

Claiming catch-up depreciation is a change in the accounting method. You’re changing from a depreciation method that’s not allowed to one that’s allowed.

Instead of filing amended returns, you must correct this on this year’s return. Follow the steps outlined in the instructions to Form 3115: Application for Change in Accounting Method.

Related Topics

Related Resources

IRA Withdraw Less Than Contributions

Learn how making an IRA withdraw less than your contributions will impact your tax return with advice from the tax experts at H&R Block.

Are Insurance Claim Checks Taxable Income?

If you received an insurance check for an auto-accident claim, do you report this as taxable income? Learn more from the tax experts at H&R Block.

How Do I Calculate Cost Basis for Real Estate?

Did you sell property over the past tax year? Find out from the experts at H&R Block how to calculate cost basis for your real estate.

Taxes And Business Losses

How do business losses affect your taxes? See if you are eligible for a special allowance and get tax answers at H&R Block.