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

Collection Due Process Hearing

Get the facts from H&R Block about IRS Collection Due Process (CDP) hearings, which you can request if you disagree with certain IRS collection actions.

How to Address IRS Penalties

Learn how to address and understand an IRS tax penalty from the tax experts at H&R Block.

IRS Letter 1025A – Incomplete Appeal Request

The IRS needs additional information to forward your case to the Office of Appeals. Learn more from the tax experts at H&R Block.

IRS Balance Due

Receiving notices for an IRS balance due? Learn how to handle and IRS tax bill with help from the tax experts at H&R Block.