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chautktran

Employee

Question

Tax Year Prior to 2020: Calculate depreciation for rental property?

Forum|Forum|6 years ago
June 7, 2019
16 replies
0 views

Where and how can I calculate depreciation expense for rental properties?

TurboTax Premier Online

anderjoe5

I didn't use turbotax last year. Isn't there a way to just enter depreciation without having to recalculate depreciation on property I bought 14 years ago?

Ed4008

Last year my depreciation on rental property (restaurant) was 27 years SL, this year it is 15 years accelerated and I want to change it and can’t.

ThomasM125

You would need to delete the asset entry and then re-enter it to change the depreciation years or method. When you add the asset back in, TurboTax will calculate the prior and current year depreciation based on the cost and date the property was put into service in the business.

@Ed4008

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stacysmomstl

united states railroad rollover amount

retire2sun

I am not using turbo this year but my CPA needs to know the depreciation schedule turbo used on my Arizona house and Colorado house were do I find it?

LauraChristine

How can I find the depreciation schedule turbo has used for several years. I will be selling the property this month and need this information

Critter-3

If you did not already save a copy of the return WITH the worksheets do so now ...

How do I access a prior-year return?

Here's how to view and download your prior-year returns. You can access returns for the past seven years.

First time signing in this year

Sign in to your TurboTax account and continue through your prior year summary (EVEN IF YOU WILL NOT USE THE TT PROGRAM FOR THE 2021 RETURN). Make sure you're using the same TurboTax account (user ID) as in prior years.
On the next screen click on TAX HOME then scroll down and select Your tax returns & documents.
Select the year you want, then select Download/print return (PDF).

If the year you're looking for isn't there, it might be in a different account. Go here to find all of your accounts.

If you've started your return already

There are two ways to get your prior-year returns.

Select Documents from the side menu, use the drop-down menu to choose the tax year you want, and select Download tax PDF.
From Tax Home, scroll down and select Your tax returns & documents. Select the year you want and select Download/print return (PDF).

Note: If the year you're looking for isn't there, it might be in a different account. Go here to find all of your accounts. One of them should have the return you're looking for

Need to prepare a prior-year return? Go here instead.

Related Information:

Can I get a copy of my tax return from the IRS?

DS30

Employee

Depreciable basis : Generally, depreciation on your rental property is the based on the original cost of the rental asset less the value of the land (because land is not depreciable). The original cost can include various expenses related to the purchase of the property. If you make a capital improvement to the rental property, you will depreciate it using the same useful life of the underlying property. If you don't know the original house and land separate costs, you can use the percentage of house and land to total value listed on your property tax bill to allocate the original cost.

So for example, if you bought a rental property (house and lot) for $148,000, had capitalized purchasing expenses of $2,000 and the cost allocated to the land part of the purchase was $50,000, then your depreciable basis in your rental property is $100,000 ($148,000 + $2,000 - $50,000).

Residential real estate is depreciated over a 27.5 year life on a straight-line basis and used a mid-month conversion (this means that for the month placed in service, no matter what day during the month, you will only get a half of month worth of depreciation for this first month).

Click for more information about depreciation on rental property

You need to enter your rental property as an asset under the asset section of rental properties.

To enter this transaction in TurboTax, log into your tax return and type "rental (schedule e)" in the search bar then select "jump to rental (schedule e)", TurboTax will guide you in entering this information

Alternatively, To enter this transaction in TurboTax Online or Desktop, please follow these steps:

Once you are in your tax return, click on the “Federal Taxes” tab ("Business" tab in TurboTax Home & Business)
Next click on “Wages & Income” ("Business Income and Expense" in TurboTax Home & Business)
Next click on “I’ll choose what I work on”
Scroll down the screen until to come to the section “Rental Properties and Royalties”
Choose “Rental Properties and Royalties” and select “start’ (or “update” is you have already worked on this section)

Enter your rental property information through the TurboTax guided questions (or choose edit rental property if property is already listed) until you come to a screen that is titled, Your "rental property name" rental summary. You will enter your rental property house here under "assets/depreciation".

Under the asset/depreciation section - select start

Select "yes" to "Do you have assets for this property that can be depreciated?
About 3 screens in, you will enter the house as an asset here. This is where your enter all your rental assets (including capital improvements)
For the rental house (or any capital improvements), you will select "Rental real estate property"
Then for the rental house, select "Residential Rental Real Estate"
On the next screen, you will enter information about your Rental property asset including:

Property description - usually street address (type of capital improvement)
Cost - generally what you paid (if this is a conversion of your primary residence, then you would use the lesser of FMV at time of conversion or cost.)
Cost of Land - If cost, as listed above, includes land, put the total amount of land cost here (land is not a depreciable asset)
Date purchased or acquired - this is the original date of purchase or acquisition of the rental house.

On the next screen report purchased new or sold in current year and your business use of the property since acquisition.
You will then get a screen that will confirm prior year deprecation (If asset is over one year old) Just remember that the IRS assumes that you have taken the correct amount of deprecation on your rental asset regardless of if you did or did not). If you change this amount, TurboTax will calculate a new straight line depreciation amount using the new basis information (cost less prior year depreciation) over the assets remaining life.
On screen titled "special handling required?" - select "no"
Then you will get an asset summary page showing current year's deprecation. If you select show detail you can review your entry details.
You can add additional rental assets on the next screen by selecting "add an asset".

Here is a link that can provide you with helpful information related to your rental property

TurboTax - Tips on Real Estate Taxes and Real Property

DS30

Employee

Please see undated answer including additional screenshots.

AnnetteB6

Use the following steps to enter information about your rental property so that it will be depreciated in your tax return. These steps assume that you have already entered some information into your return with regard to your rental income and expenses.

Starting from the Rental Properties and Royalties or the Business Income and Expenses (Schedule C) selection under income, choose Update or Review to get to the details about your rental or business
Proceed to the summary page, then Edit your rental property or business name
Proceed through the questions until you reach the area where you can click Start or Update for the Assets/Depreciation section
Proceed to the point where you adding an asset on the page titled Describe This Asset
If you are entering the rental property itself, enter a description or the property address, then choose the first option on the list, Rental Real Estate Property, then click Continue
On the next page titled, Tell Us a Little More, select Residential Rental Real Estate, then click Continue
Proceed through the remaining screens entering the details about your property so that depreciation can be calculated

@al511

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rdl

Hi, I run a rental business in an LLC with another member with the 50% split. The rental income and expenses, including the property tax, are handled in the LLC's bank account, but the rental property is still under my name. In that case, do I take the rental property depreciation in my LLC business tax form or do I take it in my personal tax form? Does it matter where the depreciationi is recorded? Also does it impact the 20% QBI deduction amount? Any help is appreciated. Thanks

MAK70

You will want to report the depreciation on the LLC Partnership(?) return. Even though the property is still in your name, it can be a capital contribution to the partnership- although you may want to see if you are required or if there are benefits to changing the property to the LLC. (This is beyond the scope of the tax advice we can give here).

@rdl

Artist77

turbo tax is giving me a very high depreciation more than twice the year before

pixelrogue1

This is a great post, and great informative dialog in the thread.

I purchased an investment property at the end of 2019, which was not rented until 2020. There are a number of expenses/improvements that are to be capitalized on the 2019 return and I am looking for instructions on the capitalization process. Thoughts?

If you seek additional context, thread is located:
https://ttlc.intuit.com/community/taxes/discussion/re-purchased-new-construction-home-investment-property-q4-2019/01/1339162#M484449

pixelrogue1

Appreciate the walkthrough below.

When entering the price of the rental property, are you including the final number on the settlement sheet (inclusive of all fees,) or price of the house and enter fees in different areas?
TT screen states right on it to include fees such as legal to obtain asset, yet other TT references entering points as a separate depreciable asset?
Condo, so now sure how (or if it is possible) to break out cost of land itself. Other options?

ThomasM125

The price would include all closing costs, except for prepaid items and any costs deducted in the year of purchase, such as property taxes and points.

The cost of land would be entered in TurboTax separately, to be deducted from the cost of the property entered.

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bgeorgeu

I have never used depreciation within TurboTax on my rental property. I bought the property (3 bdrm condo) in 1997. Lived in it until I retired in 2014 and started to rent it out in 2015. Is it too late to use the depreciation and will that give me an added tax benefit?

Critter-3

You need to RUN to a local tax pro that understands the form 3115 to get that situation corrected and file the 2019 return if you have not yet done so. This is not a form the program supports and it is not one you can do for yourself.

bgeorgeu

Thanks for the response! Now, I've already filed 2019. Can I do this with 2020? I'm definitely going to get a tax person next year! 😕😕

marlish

How do I stop depreciation when no longer renting and put up for sale? Stopped renting in September 2020 and sold in January 2021

Critter-3

In the rental section indicate the property was taken out of service and enter the date and make very sure you keep a copy of the return with the worksheet so you have the depreciation information needed when you enter the rental sale on the 2021 return as the rental will NOT carry forward.

dogmom88

Hi all - I have a similar question but I don't see it specifically addressed here. Inherited a rental home in November 2020. Working on both final 1040 for decedent and 1041 for estate for 2020. The 1040 turbotax calculated the depreciation deduction based on the adjusted basis of the decedent in the property. When working on the 1041 in turbotax business, used the FMV as of date of death as the basis and entered the date of acquisition as the date of death, but the depreciation deduction turbotax is calculating (basis * 3.485%) seems to be for as if the estate owned it for all of 2020 EXCEPT for December - which seems backwards to me. I was thinking the estate would only have depreciation for December (i.e. basis * 0.152%). Am I thinking about that wrong?