First Year Property Rental - Depreciation is zero

Forum|Forum|2 years ago
February 3, 2024
1 reply
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I purchased a rental property and closed on it 02/28/2023. I placed the property into service on 03/01/2023. - Received one months rent in December. I incurred 10 months worth of expenses during the year (all accounted for). I entered the purchase price, land value and the end result is depreciation = zero. What a I doing wrong because I should get 10 months of depreciation for the property.

TurboTax Home & Biz Windows

DianeW777

it depends. If you indicated the property was not placed in service until the month you rented it (December), depending on the date there may be no depreciation calculated.

Double check the date you indicated the property was placed in service. The 'placed in service' date is the day you made it available for rent, and advertised it as such. You are allowed to have depreciation for a half of the month placed in service and a who month for each of the rest of the months for the year. The building is depreciated under the straight line mid month method (SLMM) over 27.5 years. A half a month for the month placed in service and the month removed from service.

The fact that you did not received rent until December does not mean the property was not placed in service earlier as you indicated (March 1, 2023). As long as you did not use it for personal purposes all expenses are allowed for March - December, 2023.

Search (upper right) > Type Rentals > Use the Jump to... Link > Continue to Edit the rental activity, then click on Assets to review/edit the date placed in service

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