IRS Assumes Depreciation is Taken? - Posted by Dazed and Confused

Real Estate Investing Real Estate Law
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Posted by Dazed and Confused on April 24, 2005 at 20:41:11:

Thanks all, for the replies.

Dazed

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IRS Assumes Depreciation is Taken? - Posted by Dazed and Confused

Posted by Dazed and Confused on April 23, 2005 at 19:52:36:

I just read somewhere that the IRS will assume you take depreciation even if you didn’t. Is that true?

If so, is there any way to “catch up” on all the depreciation not taken?

Thanks,
Dazed

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you could minimize the hit… - Posted by David Krulac

Posted by David Krulac on April 24, 2005 at 19:44:19:

  1. by filing amended returns, I think you can go back 3 years.

  2. if you have owned/put in service more than 3 years ago select an extremely long depreciation schedule to minimize the impact. 27.5 years is the MINIMUM for residential, you could go 100 years if you wanted to.

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Re: IRS Assumes Depreciation is Taken? - Posted by William L Exeter

Posted by William L Exeter on April 24, 2005 at 12:32:14:

Yes, that is true. For example, if you acquire property and do not depreciate it and then sell it with out completing a 1031 exchange, you would have to recapture the depreciation and get taxed at 25% for federal purposes and then what ever state rate applies. You would have to file amended income tax returns in order to fix the issue, however, your tax advisor should have already known all of this.

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Re: IRS Assumes Depreciation is Taken? - Posted by dealmaker

Posted by dealmaker on April 23, 2005 at 20:43:45:

For the first part, yep it’s true, taking depreciation is NOT OPTIONAL.

For the second part I guess you could file amended returns for those years, consult your CPA.