Incorrect prior depreciation from prior year in misc. investment expenses

Forum|Forum|5 years ago
April 3, 2021
1 reply
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I have several items of investment assets to be depreciated over time and they are in TurboTax since day 1 (several years ago). This year when TurboTax transferred the previous year tax form, it did not get the prior depreciation amounts correctly. E.g. some of the prior depreciation is larger than the total initial cost, which triggered an error in the final review. I went back to the investment expenses section and corrected all the "prior depreciation" amounts using the numbers from 2019's form 3885A (prior depreciation + current depreciation columns). However after all is done, the 2020 form 3885A is still showing prior depreciation amounts different from my input. Some of these amounts are larger than the initial cost of the item and I assume they are incorrect.

I also tried inputting 2019's prior depreciation column only as the "prior depreciation" amount in the investment expenses section. The 2020 from 3885A still shows seemingly random prior depreciation numbers different from my input.

How to correctly input the prior depreciation amounts?

Thanks.

Carl11_2

Employee

First, be aware that I know nothing about CA state taxes (which is what I assume you're dealing with here, since the 3885A is a California form.)

You may need to check things on the federal tax return first. In most cases the state return imports it's data from the federal return. I do not know if the CA state return imports the depreciation information from the federal return, or not.

It may also help someone who is more familiar with the CA state return to help you, if they know if your investment is passive (SCH E asset) or non-passive (SCH C asset).

ytlAuthor

Thank you Carl for your reply.

I am actually trying to change the prior depreciation amounts in the federal tax section of TurboTax. But I am getting the numbers from form 3885A which is indeed a California form as you pointed out. I cannot find any form or report in the Federal tax return printout (even in the detailed "for your records" version) that has itemized investment asset depreciation. My assets are for schedule E.

Carl11_2

Employee

You need to pull up the IRS Form 4562 from your 2019 return. There are two of those forms for your rental property. Both of them print in landscape format. One is titled "Depreciation and Amortization Report" and is most likely the one you need. The other is titled "Alternative Minimum Tax Depreciation" and if that one is needed, you will be specifically asked for "AMT Depreciation".

If you used the online version to prepare your 2019 tax return, then you need to download the PDF file from your online account. The forms will be in that PDF file.

If you used the CD/Desktop version to prepare your 2019 tax return, then you need to open the 2019 tax return in the TurboTax 2019 program on your computer.

- Under the FILE tab select the "Print/Save for your records" sub-tab.

- Click the "Save a PDF" button.

- Select the "Forms and supporting statement" radio selection box.

- Click the "Save as PDF" button.

This will save a PDF file to your computer with absolutely everything; all calculation forms and worksheets including the 4562's mentioned above. . So you can expect it to be over 100 pages. Search that PDF file for the two 4562's mentioned above.

On the 2019 from 4562 add together the amounts in the prior depr column and current year depr column. That total is the amount you should have for that same asset on your 2020 tax return, in the prior years depreciation.