Unexplained AMT adjustment/preference for Rental Property depreciation

Forum|Forum|1 year ago
March 30, 2025
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I have a foreign rental property in service since 1/1/2022. Its price is 399,788, not including the land. I take 30 years as recovery period. In this case the depreciation should be 12,726. However, TurboTax adds an AMT adjustment/preference of $-19 in line 14 of Schedule E asset worksheet, and the resulting depreciation is 12,707. How can it be explained?

DaveF1006

Turbo Tax is applying an Alternative Minimum Tax (AMT) adjustment to your foreign rental property depreciation. This happens because AMT rules often require a different depreciation method than regular tax calculations. Specifically, AMT depreciation tends to use a longer recovery period or a different calculation method, which can result in slight differences in depreciation amounts2.

In your case, the $-19 adjustment suggests that TurboTax is making a minor correction based on AMT rules. This adjustment is not an additional tax but rather a recalibration of depreciation for AMT purposes. The IRS requires taxpayers to calculate both regular tax depreciation and AMT depreciation, and you pay whichever results in a higher tax liability.

If you want to verify or adjust this, you can:

Check Form 6251 in your return to see how AMT is affecting your tax calculations.
Review the asset entry in TurboTax to ensure the correct depreciation method is selected.

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