Can I amend my 2022 return to add rental and depreciation?

Question

I am a homeowner in Portland, OR, but moved to Washington State in 2022. I began getting the home ready to rent out in the fall of 2022. I bought tons of furniture (the intent was a furnished home) and put up ads. I'd like to take advantage of the last year where we can take a 100% deduction using cost segregation.

I already filed my 2022 taxes. Is there a way I can go back and amend the return to reflect this? I used TurboTax - bonus points if you know how to make this change there.

Michael Plaks · Answer

@Beth Julen

Yes, you can amend (redo) your 2022 taxes but only after you pass two hurdles.

1. Was your property ready for occupancy in 2022? You said that you placed ads, but was it actually ready?

2. Would cost segregation and bonus depreciation make a difference on your taxes for 2022? This is not an automatic yes, it needs to be confirmed.

Beth Julen · Answer

@Michael Plaks Thank you - that helps a ton.

Julio Gonzalez · Answer

@Beth Julen As many have mentioned above, you can still take advantage of 100% bonus depreciation for this property as long as it was placed into service. However, if you are going to take advantage of cost segregation, I would recommend working with a CPA that specializes in real estate such as Michael, Ashish, etc. or I'd be happy to provide additional recommendations rather than doing it yourself through turbo tax.

Here's an article with additional FAQs on cost segregation studies that you may find helpful. Feel free to reach out if you have any questions!https://www.biggerpockets.com/forums/51/topics/1113749-cost-segregation-faq

Ashish Acharya · Answer

If you have not filed your 2023 return, then you can amend it. Once you file a two-year return with depreciation, you cannot amend your return to report cost segregation. You will have to file Form 3115 to report the cost segregation. You still get a 100% bonus.

Account Closed · Answer

Yes you can, If it wasnt done properly the first time, it maybe a good idea to have a different accountant take a look. That likely isn't the only mistake.

Ashish Acharya · Answer

Yes, you can amend your 22 return if you have not yet filed your 2023 return. If you already filed your 2023 return, you will use Form 3115 in 2024 to correct or change deprecation.

Tanner Bellamy · Answer

You can definitely amend. However, you may want to speak with someone who knows what they are doing, have them look over what you have already filed, and let them tell you if it would be worth it.

I wouldn't go it alone or with some simple forum posts in your case. You need someone to dive into the numbers with you.

Beth Julen · Answer

@Michael Plaks

1) yes, the property was ready to rent and was advertised

2) - I don't know! I've heard about cost segregation on bigger pockets podcast and I'm basically going off that. Here's what I was told by CSSI after giving them some info on my home:

We estimate we can accelerate the depreciation of your property in the first 3 years by $22,197 in the first year through a cost segregation study performed by our firm.

Malik Javed · Answer

@Beth Julen Yes, you can amend your return, but you also have the option to file an automatic change in accounting method using Form 3115, which does not require amending any returns

Can I amend my 2022 return to add rental and depreciation?

Can I amend my 2022 return to add rental and depreciation?

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