Turbo tax calculates straight line depreciation expense for residential rental incorrectly

Forum|Forum|2 years ago
April 15, 2024
2 replies
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Because the depreciation expense amount fluctuated wildly each year, which is against STRAIGHT LINE!

maglib

Employee

@frank1618 We can not see your return, this is a public forum. TT calculates depreciation correctly unless there were changes made to default depreciation. You can review your depreciation details in Forms Asset Wks (residential) and complete by year in Asset Life History. If you make any improvements you should be entering them as new assets, not adjusting the original home. The only changes would be in the first year, depending on when asset was place into service.

you would have to attach a copy of the asset depreciation history if you think there is an issue. None are known that I am aware of.

You do have the ability to change the depreciation method but, if you entered it as residential rental property class I it is 27.5 years

Generally, you must use the Modified Accelerated Cost Recovery System (MACRS) to depreciate residential rental property placed in service after 1986.

If you placed rental property in service before 1987, you are using one of the following methods.

Accelerated Cost Recovery System (ACRS) for property placed in service after 1980 but before 1987.
Straight line or declining balance method over the useful life of property placed in service before 1981.

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frank1618Author

The property was put in rental in 2010. This should eliminate some variables you mentioned.

I did not change the depreciation to MACRS.

It just does not make sense the depreciation expense amount went up a year, went down significantly another year for Straight Line depreciation! What and why other factor(s) drove the up and down randomly?

PaulaM

Employee

The depreciation amount under SL follows a mid month convention. So your first year and last year will be different amounts. Check your form 4562 Depreciation and Amortization Report to see the method you chose for the property.

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maglib

Employee

In my first comment
You can review your depreciation details in Forms Asset Wks (residential) and complete by year in Asset Life History.
Your depreciation may be changing if you are adding additional assets to depreciate…. Or some assets useful life is over but your residential property will have same amount taken every year other than year 1 and last year.