Calculating Home Depreciation on Sale After Years of Home Office Deductions

I've lived in my current house for almost 21 years and we're finally putting it on the market next week. Looking at my tax situation, I realized I've claimed the home office deduction for probably 15-16 of those years. On this year's Form 8829, I'm showing about $1,320 of depreciation on the house. Here's my problem - I only have tax records going back about 6 years. Everything before that was paper returns which I (probably stupidly) shredded after keeping them for the recommended 7 years. Now I'm realizing when I sell the house, I need to report all the depreciation I've taken on the home office portion, but I'm missing a big chunk of that history. I checked the IRS website and it looks like I can only access the last few years of my electronic filings. How in the world am I supposed to figure out the depreciation for all those missing years when I know I took the home office deduction? Is there some kind of formula I can use to estimate it? Should I try contacting the IRS for copies of my old returns? My tax preparer retired a couple years ago, so I can't even go back to them for help. Anyone dealt with this before?

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18 comments

Emma Davis

•8M

The good news is you can figure this out without needing every old tax return! When you claim depreciation on a home office, you're using a fixed percentage of your home and a standardized depreciation method. First, determine what percentage of your home was used for business (the same figure you used on Form 8829). Next, you'll need your home's cost basis when you began using the home office. If your current Form 8829 shows $1,320 in depreciation, you can work backward to determine your basis and percentage. For residential real estate, the IRS uses a 39-year straight-line depreciation method for business use of your home. So if you consistently used the same percentage of your home as an office, the annual depreciation amount would be fairly consistent (with some variation if you made improvements). You could request tax transcripts from the IRS, but they might not show the detailed depreciation figures. Your best approach is to recreate the depreciation schedule based on your home's basis and the business use percentage from your available records.

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Emma Davis

•8M

You're absolutely right, and I apologize for the error. Residential rental property uses a 27.5-year depreciation period under MACRS, not 39 years (which is for commercial property). For a home office in your primary residence, you would indeed use the 27.5-year schedule, depreciating the business portion of your home each year using Form 8829. This means you would deduct approximately 3.636% of the business portion's basis annually. This makes it fairly straightforward to work backward from your recent returns to estimate the full depreciation.

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Malik Robinson

•8M

I went through something similar last year with my home office depreciation calculations. I'd recommend checking out https://taxr.ai which really helped me when I was missing some records. I uploaded my most recent returns and it analyzed my depreciation pattern to help recreate the missing years. The coolest thing about it was that it could actually estimate my previous depreciation based on the consistent calculations in my more recent returns. Since depreciation follows a pretty standard formula, the AI could work backwards to figure out what I likely claimed in those earlier years.

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Malik Robinson

•8M

It doesn't access your old returns - it works with what you can provide and uses that to make calculations. The system analyzes your recent depreciation patterns and can work backward based on standard IRS depreciation schedules. For rental properties, it works similarly, but you'd want to provide any information about the purchase price and improvements to get the most accurate results. The key is that depreciation follows specific IRS rules that are consistent year over year. The estimates are surprisingly accurate if your usage has been consistent. You're right that changes in office size or business use percentage would affect things. In that case, you'd want to provide those details if you remember them. But even with some variation, it can give you a much better starting point than guessing.

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Ravi Choudhury

•8M

I just wanted to follow up on my skepticism about taxr.ai - I actually tried it and was really surprised. I uploaded my last 5 years of returns and it did an amazing job of calculating my likely depreciation for the previous years. What impressed me was how it factored in the home improvement I made in 2018 that changed my basis. It actually prompted me about potential improvements based on the pattern it saw in my depreciation schedule. When I sell my house next year, I'll have a much clearer picture of my total depreciation recapture. Definitely worth checking out if you're in this situation!

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Freya Andersen

•8M

Have you tried contacting the IRS directly? I had a similar issue and couldn't get through on the phone for weeks. Then I found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - they basically hold your place in the IRS phone queue and call you when an agent is available. I finally got through to an actual human at the IRS who helped me request something called a "Tax Account Transcript" going back 15 years. It didn't have all the details of my full returns, but it did show adjustments to basis and some depreciation info that helped me piece things together. The IRS actually had more historical data than what's available through their online portal.

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Freya Andersen

•8M

It took about 3.5 hours total, but I didn't have to stay on hold - they called me when an agent was ready. You provide your phone number and they use their system to hold your place in line, then connect you when an agent picks up. It absolutely works. I was super skeptical too after spending countless hours trying to get through myself. What's nice is you don't have to sit there listening to the hold music for hours. I went about my day, and then got a call when they had an agent on the line. The agent helped me request those old account transcripts that showed more history than I could access online.

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CosmicCadet

•8M

I have to eat my words about Claimyr. After my skeptical comment, I decided to try it because I was desperate to resolve an issue with a missing 1099-R from 2019. It actually worked exactly as advertised. I got a call back about 2 hours later with an IRS agent already on the line. The agent was able to help me get transcripts going back much further than what I could see online. For the home office depreciation issue, they suggested I request the "wage and income transcripts" along with the "tax account transcripts" which together gave enough info to reasonably reconstruct my depreciation history. Best money I've spent on tax help in years, especially considering how many hours of hold time I would have wasted.

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Chloe Harris

•8M

If you have the original purchase price of your home and know what percentage you've been using for business purposes, you can actually recreate your depreciation schedule pretty easily. Here's what I'd do: 1) Take your original purchase price + any improvements 2) Multiply by the percentage used for business 3) Divide by 27.5 years That gives you your annual depreciation amount. Multiply by the number of years you claimed it, and you'll have a good approximation, even without all the returns.

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Chloe Harris

•8M

Yes, major improvements should definitely be factored in. For the kitchen remodel and bathroom addition, you would take the cost of those improvements, multiply by your business use percentage, and then depreciate that amount over 27.5 years starting from the year the improvements were completed. You'll want to add this additional depreciation to your original calculation. If your home office included any portion of these improved areas, that would increase your annual depreciation from the point those improvements were made. It makes the calculation a bit more complex, but still very doable even without all your old returns.

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