Bonus Depreciation Carryover Not Working

Forum|Forum|2 years ago
February 17, 2024
2 replies
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Hi,

I'm running into an issue with bonus depreciation on a rental property. For some reason it is not carrying over from the prior year.

My tax situation: W2 earner with 2 rental properties.

I put a rental property into service in 2022. I did a cost segregation study and utilized bonus/special depreciation on all 5 and 15 year depreciable assets. This was a large amount, so almost none of it was actually used in 2022. Now I'm filing my 2023 taxes, and would expect the "remaining" amount to carry over. However, that rental property is showing as profitable. How do I get the bonus depreciation to carry over? Note: The 27.5 year "standard" depreciation is carrying over fine.

When I go to the carryover section, this is what it displays. Why is it showing schedule E carryover, but this is not actually deducted from the income of the property? Maybe I should not be classifying it as QBI?

TurboTax Premier Online

Mike9241

there should be no bonus depreciation carryover. the bonus depreciation should be included in the PAL c/o on form 8582

Helpless4Author

Got it! I now see that it made that adjustment when I hit the "deductions" section. Thanks!

DianeW777

The following instruction should help you with the location to enter your carryover loss. You must go into the rental property income section first, then follow the steps to enter your carryover loss.

Any passive activity loss (PAL) carryforwards allowed would be listed on your Form 8582, Worksheet 5 or 6, in your 2022 tax return as 'unallowed loss'. If you have a PAL and it does not seem to be populated in your 2023 tax return you can take the following steps to enter it.
- Use the magnifying glass to Search (upper right) > Type rentals > Jump to Rentals > Select Edit beside your Rental Activity > Under Less Common Situations > Review Carryovers, limitations, at risk info, etc. > Continue to enter your passive loss carryover. See the image below for assistance.