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Solved

Depreciation and Expense problem

Forum|Forum|1 year ago
December 15, 2024
1 reply
0 views

I am doing my 2024 Business Taxes for 1 rental industrial property. I have 3 items worth $47,740 that need to be depreciated. As a test run, I filled out turbotax as if they were expenses. The net income and balance sheet were good and matched my records.

Then I removed those 3 expense items and added them to Rental Real Estate Assets so I can depreciate them. When I did this, the books were out of balance by $47,740. The only way I can make the books balance is by putting the items back in to Expenses and also leave them as a depreciation. But when I do this, the income drops $29,600 which is not right. I cannot expense and depreciate the same items at the same time.

What am I doing wrong?

Not A Product Question

Best answer by M-MTax

I guess now the only question I have left is ... since I added the 3 items manually as assets to depreciate,

will those items show up next year on Turbo Tax 2025?

will those items show up next year on Turbo Tax 2025?

Yes, they should show up next tax year if you transfer your 2024 return into your 2025 return.

What am I doing wrong?

You already said it: You cannot expense and depreciate the items at the same time.

RockhoundrobAuthor

Right. I know I cannot so both at the same time. If they are an expense, the book are in balance.

If I remove the items from expense and put them in depreciation, then the books/assets are out of balance by $47,700.

The only other thing I can think of is changing the end-of-year cash balance since they are not an "expense".

But then it will not match my checkbook records, since I wrote 3 checks for those 3 items.

Or, I need to somehow manually add $47,700 somewhere else...

The key is the fact that it is EXACTLY $47,700 error when I move it from expense to depreciation.

Are you preparing a 1065 or 1120-S?