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@MGC94 wrote:

Client sold her main home for $600,000 12/2022

Her husband passed in 2021 so she only gets the $250,000 exclusion not $500,000 

 

There are only 2 things depreciated:

Home improvements    01/01/2010           27.5/40 years            $12,750

 Rental furnishings    01/01/2009           5/9 years             $5,000

$464 deprecation a year 

 

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If I'm reading things correctly, it is not something you'll get done today.

1) $600,000 is for the entire building, right?  1/3 her home and 2/3 rental, right?

2a) What was the Fair Market Value on the date of he husband's death?

2b) Is this in a Community Property State?

3) So there is no depreciation on the original building itself?  That could be a problem (depending on your answer to #2b).  Have you looked at the two years (2000 and 2001) to check if there was no depreciation taken on the original building itself?  If not, you may need to get a copy of those two years and look (again, depending on your answer to #2b).  Depending on the answers, you may need to file Form 3115 to 'catch up' on the depreciation, which isn't necessarily an easy task.