I have had a rental property since 2016. I don't think I ever depreciated it, unless Turbotax does this automatically? What are my options now?

Forum|Forum|1 year ago
February 19, 2025
1 reply
0 views

No text available

PatriciaV

Employee

Yes, TurboTax will calculate and report depreciation expense each year on all assets that you have added to your rental property. Check your prior year return to see if you have a Depreciation Report. Or look on Schedule E Line 18 to see if you claimed depreciation expense.

If not, you can add your assets this year. After you provide the basic information, TurboTax will give you an estimate of the total depreciation you should have taken since you first placed the asset into service. Accept this value and continue to save your work. Current year depreciation expense will be reported on Schedule E for this property.

You will also need to file an application to change the accounting method for these assets (Form 3115). Because Form 3115 is not supported by TurboTax Online in the interview, you may need to switch TurboTax Desktop, where the form is available in Forms Mode. This is a complex and tedious process, and you may consider upgrading to TurboTax Live. This online service provides step-by-step guidance from a tax expert whenever you need assistance, either over the phone or by screensharing.

Additional Information:

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

d_flewellingAuthor

thank you, it currently shows a 0 in Schedule E line 18. If I understand correctly, the depreciation is not on the property itself but only on the assets? I.E. appliances? Do they only need to be new appliances that you purchased for the property since renting it out? or existing ones?

PatriciaV

Employee

Yes, the rental residence should be reported as the main rental asset for depreciation.

The converted basis of this asset is the lesser of Fair Market Value or the Adjusted Basis, which includes the purchase cost plus any additions/improvements (including appliances, carpet, furniture) that were added BEFORE you began using the property as a rental. The basis does not include the cost of the land.

Any additions you make (new or used) after you list the property for rent would be entered as separate rental assets. You can combine all assets placed in service on the same date.

See this article for an extended list: How do I handle capital improvements and depreciation for my rental?

Additional Information: