AMT depreciation or regular depreciation

Forum|Forum|2 years ago
March 26, 2024
2 replies
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When I input my rental house income, I found the TurboTax using AMT depreciation instead of regular depreciation (by H&R Block). Do I have a choice to avoid AMT depreciation in the software?

Rental Property

DavidD66

No, you don't have a choice. The program will calculate three types of depreciation: Regular Tax, AMT, State. You may have viewed one of the AMT tax forms or one of the AMT depreciation schedules, but there would be one for regular tax as well. The Alternative Minimum Tax is just a different way of calculating tax that occurs simultaneously in the program. You usually only see it or forms related to it if you owe AMT. When you have depreciation, the AMT forms are created as part of the return as the information is carried forward from year to year, but that doesn't mean you will owe AMT.

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NewfeiAuthor

@DavidD66

Thanks. I asked this question because HRBLOCK always uses regular depreciation by default, so I think there is a choice. It says,

https://www.hrblock.com/tax-center/irs/tax-responsibilities/rental-property-depreciation-and-amt/#:~:text=If%20you%20placed%20the%20property,Appliances said:

Is residential rental property depreciation subject to the AMT depreciation adjustment?

It depends on the year you placed the property in service. If you placed the property in service after 1998, you don’t have to make an Alternative Minimum Tax (AMT) depreciation adjustment on the home itself. However, AMT depreciation rates may apply if both of these are true:

You separately depreciate items you used in a residential real estate activity, like:

Appliances
Carpet
Furniture

You use the 200% declining balance method.”

DianeW777

The total depreciation used by TurboTax would be the regular deprecation of $9,326. It would not add any adjustment preference unless there was something additional creating it in your tax file. There is no indicator this would be created without manual intervention which may be in error.

As indicated by one of our tax experts, @DavidD66, a diagnostic file would be quite helpful to get to the heart of this experience and help you correct it.

@Newfei

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