How do I depreciate property when primary residence in between?

Question

I purchased an investment property in 2011 which was rented out through 2016 and then became my primary residence for the past 4 years. I would like to place the property back into service in 2021 with the idea of eventually doing a 1031 exchange for another property with the intent of it eventually becoming my primary residence. I'm not sure what steps to take regarding depreciation. Do I continue with the original depreciation schedule for my 2021 tax filing, in which the property will be year 6 of the 27.5 year depreciation schedule, or do I need to establish a new depreciation schedule?

Basit Siddiqi · Answer

@Grant WinslowYou should be keeping track regarding the accumulated depreciation through 2016. Those don't disapear just because it was a personal residence.Also, regarding the basis, you may potentially get more depreciable basis if you made any major improvements to the property during the years it was a personal residence.

Leslie Pappas · Answer

Good question and agree with @Sarah Brown that the best course of action is to consult with your CPA.

Sarah Brown · Answer

I would chat with your CPA.

How do I depreciate property when primary residence in between?

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