Tax Return for New Client

[eshaverscampbell]

I have a new tax client who didn't keep good rental property records.  I am unable to determine when the property first became rental property and what was the value of the property at that time to determine the depreciation expense.  Do you have any recommendations?

[George4Tacks]

Ask more questions.
Get as many copies of prior returns as the client has.
Back into the basis from the depreciation claimed.
Review Passive Loss carry overs, if any.
What software was used on the last return, can you do a conversion?

[gary1861]

I agree with what George suggested.  In addition, if it was always a rental, search the address online.  Zillow and others may show the history of sales of the property and I have been able to obtain information that way.  Also if it was converted to a rental in the past 10 years, some sites show valuations going back that far, that might give you some idea of the value at a specific month.

I have also used the button on the asset entry after guessing what a cost was, to see if the historical depreciation amounts match what was claimed on the return.  In my most recent (current) situation, we are doing a 2016 return and the prior CPA (in a different state) can't be located - yes 2015 was prepared over 4 years ago.  Also the taxpayer only has copies of returns from 2012 forward (spouse probably shredded the older ones), so it was a huge project, but I used all of the above to determine the basis.

[abctax55]

1)   The *VALUE* of the property is irrelevant.

2)   The cost - what your client PAID for the property is needed (unless the FMV at the time it became a rental was less than the cost).

3)   Unless there are recent sales, Zillow is virtually worthless.   Per Zillow, my house only has one bathroom....

4)  If it's a recent (last few years..) purchase, the title company should be able to provide a closing statement.

5)  What state?  In some states (CA) the property taxes are based on the historical purchase price.

[gary1861]

How do you reconcile your point #1 and point #2?  Value is very relevant if the property is converted to a rental, which is what my prior post stated.

[abctax55]

The FMV is only relevant if it is less than the cost.   

[abctax55]

Same client?

https://proconnect.intuit.com/community/proseries-discussions/discussion/how-do-determine-adjusted-b...