Why is TT business calculating $7000 in first year depreciation on a $1.15M asset?

Forum|Forum|7 years ago
June 4, 2019
3 replies
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I'm working on a trust return using TT Business. The trust acquired a residential rental property in August 2018. I entered this as an Asset under Schedule E.

Type of asset I, basis $1.2M, land $44k.

TT Business selected MACRS R SL MM, and came up with $7060 in depreciation.

But manually I come up with $15,768 based on using 1.364% for August from:
https://www.investopedia.com/articles/investing/060815/how-rental-property-depreciation-works.asp

What accounts for this difference?

TurboTax Business Windows

Best answer by Anonymous_

" Yes, this is in the USA, under IRS rules. It is a trust so form 1040 using TT Business."

I am getting $15,764 on a test return when plugging in your numbers (see first screenshot).

What can happen is the depreciation allocation can get out of whack where the trust is retaining a portion of the depreciation expense while a portion is being allocated to the beneficiary(ies).

You can change that allocation in Forms Mode in the depreciation allocation section on Sch E (see second screenshot).

S

SweetieJean

Employee

Is the property in the USA?

I

iOneAuthor

Employee

Yes, this is in the USA, under IRS rules. It is a trust so form 1041 using TT Business.

A

Anonymous_Answer

Employee

" Yes, this is in the USA, under IRS rules. It is a trust so form 1040 using TT Business."

I am getting $15,764 on a test return when plugging in your numbers (see first screenshot).

What can happen is the depreciation allocation can get out of whack where the trust is retaining a portion of the depreciation expense while a portion is being allocated to the beneficiary(ies).

You can change that allocation in Forms Mode in the depreciation allocation section on Sch E (see second screenshot).

I

iOneAuthor

Employee

I solved it in the end by saving the return, and loading it back in to TurobTax. I made no change, and the number ended up right back at the $15,764 it should have been in the first place.