Not a response to you question, but your post causes me to ask how does a SFH ever have a zero basis?It can't. Or more correctly, it shouldn't. But since we have to deal with depreciation that was allowed or allowable, if the depreciation [incorrectly] allowed equals the original cost, the basis will be zero.There's also the issue of timing. MACRS started in 1987. And I think that residential real estate has always been 27.5 year property. Therefore, this year - 2013 - would be the final year of depreciation for residential real estate placed in service in 1987.Now you have got me wondering if I did the depreciation correctly. In this case the rental was placed in service in 1984 and depreciated using ACRS? 20 year S/L MM in effect at that time until fully depreciated in 2004. Yes there were improvements made in later years and they are being depreciated using the MACRS 27.5 S/L MM. Are you saying the current value of the improvements is the property basis to use on Form 4684?Thanks for your concurrence to chalk the out of pocket expense to repairs.George
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