depreciation & inherited property

[Catherine]

What happens to the original owner's depreciation (allowed or allowable) when a rental property is inherited? Does it go poof! like a soap bubble, or does the inheritor have to recapture it if/when they sell the property?

[BulldogTom]

Poof.   New owner, new basis.  Start from scratch.   You will have some depreciation if it is continued as a rental.

Tom
Longview, TX

[Catherine]

1 minute ago, BulldogTom said:

Poof.   New owner, new basis.  Start from scratch. 

That's what I thought, but could not find specific confirmation. Thanks, Tom!

[Terry D EA]

Thats what I thought too and without a reference. Client inherits the property at FMV date of death. That's their basis and start over.

 

[schirallicpa]

Catherine- if the IRS would just use words like "poof" we would be able to do our research a little more efficiently!

[jklcpa]

Similar topic and discussion from late last month:

 

 

[DANRVAN]

On 4/13/2023 at 11:46 AM, Catherine said:

could not find specific confirmation

Code section 1014(a).

[michaelmars]

Good time to do a cost seg

 

[Catherine]

On 4/14/2023 at 3:51 PM, DANRVAN said:

Code section 1014(a).

They hide when I look for them. Somehow the key words I pick for searching never get me the pieces I need. Thanks!

[Abby Normal]

I used ChatGPT's free version to ask some tax questions and the results were very good. All our tax research will be AI driven fairly soon, and personally, I've been waiting for this my entire career.

[mcb39]

On 4/13/2023 at 9:40 PM, Terry D EA said:

Thats what I thought too and without a reference. Client inherits the property at FMV date of death. That's their basis and start over.

 

This is exactly what I was going to say.

[jklcpa]

I looked at ChatGPT's site for a few minutes and have been receiving emails from it ever since then... without giving it my addy. 

[Lion EA]

I looked a couple times, didn't think to bookmark it or save it in any way, and have never heard from them. I wished I would hear from them, because I had to really search hard to get back to it. My first time returning, I saw the two letters (price increase, firing) it wrote for me. But the next time, I couldn't get back to that same place! After tax season. Besides, now there's something like ChatGPT4 and our search engines will be using it, and hopefully out tax software...