Rental property building depreciable cost is 0

Forum|Forum|3 years ago
April 14, 2023
2 replies
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I have a rental property which original purchase is 500,000, and land cost is 100,000. This property is converted to rental property this year.

However, if I entered the land cost as 100,000, building cost shows as 0.

If I entered the land cost as 0, then building cost shows as 500,000.

I believe the building cost should be 500,000 - 100,000 = 400,000 here.

Am I correct? Anyone facing the same issue??

TurboTax Premier Online

DianeW777

Yes, you are correct. The building cost for depreciation is $400,000 and the land will not be depreciated. Try using the steps below and if you continue to have this experience, use only the building and you can always add the land in the future. Keep your records with your tax return. This is not a common situation.

In your situation, you should first clear your cache and cookies. It handles many issues that seem nonsensical on a regular basis. Close your TurboTax return first.

Watch to be sure you are selecting 'all time' as example. Do not use selections like 'last hour' for those browsers that give you options.
How to clear your cache

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Carl11_2

Employee

In the Assets/Depreciation section where you enter costs, you have two boxes:

COST - This is what you paid for the property in full. (this will include some of your closing costs)

COST OF LAND - This is the amount of whatever you entered in the COST box, that is allocated to the land. The amount in this box CAN NOT be more than the amount in the COST box.

The program (not you) will subtract COST OF LAND from COST to determine the value of the structure to be depreciated.