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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

Show previous replies

joelgood

We bought a house that was then 36 years old and rented it out for 2-6 months each year from 2010 t0 2020 when we sold it. Because our applicable expenses for the months it was available for rent exceeded your rental income in most years, we didn't realize we had to take depreciation since we understood we would have to recapture it when we sold the house. We did sell the house in 2020 and are paying capital gains on the house on our 2020 return. But we have been told we also have to claim the depreciation we didn't take those years. How do we calculate the amount of depreciation for all those years? Or can we just claim depreciation in 2020?

DaveF1006

In order to claim depreciation, you must claim it in the year of service. You cannot claim it all in one year. You can amend your 2018 and 2019 tax return to claim the depreciation that wasn't claimed in those years but not earlier than 2018.

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Gerald E Block

Depreciation for all my rental properties was not included on my ScheduleE

wong1021

I followed the turbotax program to calculate my rental property depreciation. I entered the prior year depreciation value from last year tax return. Also filled in total expense of the rental property including property tax, management fee etc. However, the summary use the total expense number under the "depreciation" column, I am wondering if there an error in the program. The depreciation amount should be more or less the same as last year as it is taking a linear depreciation over 27.5 year.

Anyone has similar problem?

Thanks

FangxiaL

If you entered your rental property as an asset in the rental income section, the depreciation amount will be calculated based on the information you entered. Depreciation is deductible along with other rental expenses and fees incurred. Depreciation is reported on line 18 of Schedule E.

For help with entering rental property, see this help article.

@wong1021

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mgearheard

I am half owner of a residential rental property, therefore I should get 50% of the depreciation. The calculation should be (basis divided by 27.5) X 0.5. But your calculation does not seem to take into account my part ownership. Earlier in your questions, I noted that I am not the sole owner? The depreciation you calculate appears to be for a sole owner.

Specifically: basis is $134, 729. Property was placed in service 01/01/2019. Previous depreciation claimed for two prior years was roughly $4700, total, which was calculated by our accountant.

Can I override your calculation and enter what I think is the correct amount of depreciation?

DaveF1006

It depends. After you informed Turbo Tax that you weren't the sole owner:

The next screen should say Property Ownership Here you will say no, you owned less than 100% of XXXX.
Next screen Turbo Tax will inform you that they can automatically divide up the income and expenses for you.
Here you can enter total amount for income and expenses and then there will be a dropdown that will allow you to enter a percentage. Here you will probably say 50.
Here is a snapshot what the screen should look like.

@mgearheard

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mgearheard

Thanks. I chose to enter the data myself, having already divided all the expenses (taxes, insurance, etc.) by 2. Maybe that's why I never was asked about my percent ownership. should I go back and let Turbo Tax calculate and provide the total amounts?

mike

CrumpR

Yes, that is what i expect. When i went to complete schedule c for my single owner llc, residential real estate was not available and the system calculated depreciation incorrectly. I am looking to understand what version of turbo tax i need to properly file. I currently have Turbo tax home and business 2021.

Does anyone know the correct version to use.

GeorgeM777

TurboTax Home & Business will generate a Schedule C for your business. Rental property information is entered in the Business section. In Business Income and Expenses, select the Rental Properties and Royalties subcategory and enter your rental property information.

Why do you feel the depreciation was calculated incorrectly? Whatever numbers you can provide will help us better understand your tax situation.

@CrumpR

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Raeka

I have a new question but couldn't figure out how to create a New post it so am replying here.

I added a new renovation and addition to my rental property last year (2020). I called it hall project. I added the total in supplies and work to my depreciation schedule. The project in not finished. Now I need to add some expenses for this past year (2021). How do I add them to current depreciation table? The project is still not finished and may go on another 1 or 2 years so I will need to keep adding to that project until its complete. Thanks in advance for any help here.

DaveF1006

To clarify, is this rental property currently being rented and occupied?

@Raeka

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Raeka

Yes. Its an apt. house. All units rented. I'm doing renovation of hall area that isn't yet completed. I think I messed up last year adding expenses to depreciation schedule when I should have put them aside on (I don't know where) until the job is completed and then add the completed job to dep. schedule when done. I think I have to amend last year's return.

But where do I keep those expenses on my business return until it's completed?