TurboTax - Depreciation Not Being Calculated at All

Forum|Forum|2 years ago
February 8, 2024
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I entered all of my rental property information and Turbo Tax has incorrect information on the Depreciation Report as well as not calculating any depreciation. My purchase price was $155,000 and the land value is $25,400. On the Depreciation Report the land value field has $156,788 and nothing in the Cost (Net of Land) field. This is obviously why my depreciation is zero, but I have no idea where it's getting this value from and why the Cost field has nothing in it.

TurboTax Home & Biz Windows

Carl11_2

Employee

My purchase price was $155,000 and the land value is $25,400

The most common reason this occurs, is because the user misinterpreted the information being asked for. Easy to do with the way things are worded.

COST - For you, enter $155,000

COST OF LAND - Enter $25,400

You also most likely entered a number greater than zero, for the number of days of personal use. Again, easy to do if one misinterprets the small print on that screen. You may have entered less than 100% business use too, which is usually incorrect. Also, use the information below to check all of your entries pertaining to the data for that asset, that you enter in the Assets/Depreciation section for the property.

Rental Property Dates & Numbers That Matter.

Date of Conversion - If this was your primary residence or 2^nd home before, then this date is the day AFTER you moved out, or the date you decided to lease the property – whichever is later.
In Service Date - This is the date a renter "could" have moved in. Usually, this date is the day you put the FOR RENT sign in the front yard.
Number of days Rented - the day count for this starts from the first day a renter was contracted to move in, and/or "could" have moved in. That would be your "in service" date or after if you were asked for that. Vacant periods between renters do not count for actual days rented. Please see IRS Publication927 page 17 at https://www.irs.gov/pub/irs-pdf/p527.pdf#en_US_2020_publink1000219175 Read the “Example” in the third column.
Days of Personal Use - This number will be a big fat ZERO. Read the screen. It's asking for the number of days *YOU* lived in the property AFTER you converted it to a rental. I seriously doubt (though it is possible) that you lived in the house (or space, if renting a part of your home) as your primary residence, 2nd home, or any other personal use reasons after you converted it to a rental.
Business Use Percentage. 100%. I'll put that in words so there's no doubt I didn't make a typo here. One Hundred Percent. After you converted this property or space to rental use, it was one hundred percent business use. What you used it for prior to the date of conversion doesn't count.

rkikendaAuthor

Carl,

Thanks for the quick reply and detailed information. Unfortunately, all of the things you pointed out I have done. That's why I'm baffled by it not being correct. Playing around with it some more...the only way I can get it to calculate depreciation is if I enter a non-zero amount of time for personal use (weird I know). Then I change it back to 0 and the depreciation stays there but is not the correct amount either. I even deleted the entire property entry and started over and still get the same result. I'm hoping I'm missing something simple, but I have done everything you suggested.

Ryan

Carl11_2

Employee

I've no doubt you're missing something, and it's probably simple. Otherwise, if it was a program issue there would be hundreds, if not thousands of posts about it, this far into the tax season. Another common cause is that folks don't read "all" of the small print on each and every screen, before entering data or making selections.
Delete the asset entirely and re-enter it again, using the details I provided above and make sure you read all of the small print.
Is there are reason why your personal use days would not be zero? If so, then an explanation may help me understand.
If the amount of deprecation you're getting is not zero, and it's not correct, then what makes you conclude it's not correct? (I suspect you're using simple math, while the tax laws don't make it that simple.)