Depreciation Required, Or No Longer Relevant?
My parents bought a property in 1965 for $17,000. This property had 2 houses on it. My parents and I lived in 1 house and the 2nd house was rented out. Around 1970 or 1971 my parents bought another property with a house on it and we all moved there and my parents began renting out the 2nd house on the 1st property. My mother passed away in 1984. In 2012 the rental property was sold for $255,000.
At this time my father is aged 93, has dementia, and is being cared for in a nursing home. I am attempting to catch up on my father's tax returns for recent years, in particular the return for the year 2012.
In the past my parents always used tax preparation services, however I cannot locate all the old returns, and my father is really unable to communicate meaningfully with me any more. I find myself getting bogged down on the issue of depreciation.
Can someone assist me with some ideas? If my parents had taken depreciation early on (and I'm not sure about it), would it have been on the original purchase price of $17,000? Do I have to worry about the concept of Depreciation Recapture?
Any help would be greatly appreciated. Many thanks