Can I increase rental property depreciation?

Forum|Forum|3 years ago
February 13, 2023
1 reply
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Hi All,

In 2020 I bought a rental property with my girlfriend. We each owned 50% and filed our taxes separately. Therefore, we each divided all tax deductible expenses and rental income by two and submitted in our separate tax forms.

Well, we got married in 2022, so together we own 100% of the property (obviously). Now we are filing jointly, and I'm wondering how to increase the depreciation. Turbotax is pulling my previous year's depreciation for the property which was 50%.

Since 2020, Turbotax has calculated my depreciation over 27.5 years. I'm unclear if it's straightforward in Turbotax to increase depreciation mid-cycle now that we can claim 100% of the property together.

Thanks in advance!

DianeW777

You can make the change easily for your 2022 tax return filing jointly. Change your cost basis to 100% of the cost (building and land) or change your business use percentage to 100% depending on how you entered your asset(s) originally. If you make either of these changes, TurboTax will combine the depreciation used by each of you separately for 2020 -2021, and then calculate the correct current year depreciation at 100% ownership. The date placed in service will not change.

Keep the records from your girlfriend's return as part of the tax file for 2022. The asset(s) doesn't really change at all, just the way it's being reported at 100% in 2022 vs 50% on each return for the prior years.

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Carl11_2

Employee

When you change assets to 100% of their value of 100% business use, the program will automatically figure the combined total depreciation already taken in prior years. But don't forget about your carry over losses if either of you have those. They are not automatically combined.

If you have carry over losses, they'd be on form 8582.