Question

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

Answer

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.

 

Related Topics

Related Resources

Tax Filing Extension Deadline | H&R Block

Do you need more time to file taxes? Review these time-sensitive tax pro tips to prepare for the tax filing extension deadline. Read more from our pros on the H&R Block blog.

IRS Letter 313C – Federal Tax Deposit Penalty Proposal

Learn more about letter 313C and how to handle an IRS failure to deposit penalty with help from the tax experts at H&R Block.

IRS Letter 2840C – Installment Agreement

An installment agreement has been set up for your tax balance due. Learn about IRS letter 2840C and get the facts from the tax experts at H&R Block.

Form 1099-B, Proceeds From Broker and Barter Exchange Transactions

If you sold stock, bonds or other securities through a broker or had a barter exchange transaction, you will likely receive a Form 1099-B. Learn more from H&R Block.