Rental Property Moved into LLC on August 31 - How to report partial year depreciation on Form 1065

Forum|Forum|3 years ago
April 2, 2023
1 reply
0 views

Hi,

I have a condo that I started renting out in September 2013. On August 31, 2022, I created an LLC (two members, my wife and me, so Partnership reporting) and added the condo as the only asset into the LLC. I continued to rent out the property for the remainder of 2022. I have reported the pro-rata rental income, expenses, associated depreciation, etc. on our joint form for the period 1/1/2022 through 8/31/2022. I understand I need to report on Form 1065 the related income, expenses and depreciation for 9/1/2022 through 12/31/2022. However, when trying to account for the partial year depreciation expense - TurboTax Business is only showing the full annual depreciation amount (i.e. 1/1/2022 through 12/31/2022). I don't want to double count my depreciation and have depreciated asset values all screwed up through my return. Does anybody know how to account for partial year depreciation for a new LLC formed in TurboTax Business? Thanks

cg2323Author

We live in Massachusetts and the property is in Massachusetts

PatriciaV

Employee

You may have not indicated the date you started using the asset for business (9/1/22) on the LLC return.

Open your return and go to Federal Taxes >> Rental Real Estate >> Rental Real Estate Assets (Depreciation) and edit the asset.
On the page "Tell Us About This Asset," confirm that the date under "When did you buy this asset (or start using it in the business)?" is the later date (not the purchase date).
The Asset Summary page will show the depreciation amount for the current year, using the "Purchase Date" as the beginning date for depreciation.

Note that between the Schedule E on your personal return and Form 8825 of the LLC return, you are reporting a full year of depreciation.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"