Canadian Rental Property, purchased in 2004, can I depreciate over 27.5 years?

Forum|Forum|2 years ago
January 26, 2024
1 reply
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I use to have my taxes done professional and now I am using TurboTax. My depreciation schedule from my account is for 27.5 years however TurboTax is only letting me do it for 40 years.

TurboTax Online

Best answer by Rick19744

A few comments:

Your prior preparer was incorrect on the depreciation life of this foreign rental property
Foreign rental property placed in service after 2017 is depreciated over 30 years.
Foreign rental property placed in service before 2018 is depreciated over 40 years.
Go back through the TT questions to make sure you answered all questions correctly. Since this is not new, I would be surprised if TT doesn't handle this correctly.
Now the final issue, you need to meet with a tax professional to prepare a Form 3115 as you used an incorrect method in prior years and this form will provide the adjustment to adjust the incorrect depreciation taken. You should not file your 2023 return until this is corrected.
And the 2nd final comment, just be aware that you may have some FBAR reporting requirements.

Rick19744Answer

Employee

A few comments:

Your prior preparer was incorrect on the depreciation life of this foreign rental property
Foreign rental property placed in service after 2017 is depreciated over 30 years.
Foreign rental property placed in service before 2018 is depreciated over 40 years.
Go back through the TT questions to make sure you answered all questions correctly. Since this is not new, I would be surprised if TT doesn't handle this correctly.
Now the final issue, you need to meet with a tax professional to prepare a Form 3115 as you used an incorrect method in prior years and this form will provide the adjustment to adjust the incorrect depreciation taken. You should not file your 2023 return until this is corrected.
And the 2nd final comment, just be aware that you may have some FBAR reporting requirements.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.