When I add my rental property under "Your Property Assets" in TurboTax, the software says that my depreciation deduction is $0. This is dead wrong. How do I correct it?

Forum|Forum|4 years ago
April 15, 2022
1 reply
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I was 50% owner of the property throughout 2021. I previously entered that it was used 75.56% for rental (as I also lived in one room for part of the year). I entered 2020's depreciation deduction as $2751. I clicked "Yes" to the question "Does this require special handling?", since the percentage of the year I used it for rental purposes changed between 2020 and 2021. TurboTax then cheerily reports that my depreciation deduction is $0 and it gives me nowhere I can click to change this or input the correct value. Clicking "Edit" beside this asset in my asset list on the page titled "Your Property Assets" simply takes me back through exactly the same prompts/questions and gives me the same incorrect result ($0 depreciation reduction). Help!

TurboTax Self Employed Online

Carl11_2

Employee

First thing I'm not clear on.

- You "were" 50% owner throughout 2021? What about before and after 2021?

- Were you 50% owner before and after 2021?

- Typically "you" don't enter a depreciation amount. The program figures that "for you" based on the selections you make and the numbers you enter. So how was the $2751 figure arrive at? By you personally? Or the program?

- Was the property 100% rental use before and/or after 2021?

I'm asking the above, because there are many things related to your scenario, as well as my assumptions, that the program just flat out will not and can not handle correctly without jumping through hoops of fire over a pit of lava. For example, a change in percentage of business use (especially mid-year) is one thing the program just can't handle correctly.

- Having lived in one room "for part of the year" makes the property 100% business use up until the date it was decided to longer rent that space, but to use it for personal use only. Then on that date the business use percentage was changed to less than 100% percent business use. The program can not handle this scenario correctly. You would be better off leaving the property at 100% business use the entire year, and then claiming personal use days. The program "can" handle that.

TurboTax then cheerily reports that my depreciation deduction is $0

There are quite a lot of things here that can cause that. For example, if you took too much depreciation in one or more prior years, or if you claimed any days of personal use of the rental portion, when there was none. So for "days of personal use", if there was no personal use of the rental portion at any time during the year, then your personal use days will be ZERO. Of course, that conflicts with what I stated above, because I don't have a full grasp on just exactly what you've done in the program in your attempt to reflect the reality.

richardlawtondavAuthor

Thank you so much for your detailed response.

I played around with every possible entry. Where I was asked if I had bought and sold the property, I checked yes in both places, and I entered a purchase date of 07/01/2020 and a sales date of 04/01/2022. For some reason TurboTax treated the sales date as though it were in 2021. As soon as I checked "No" for both purchase and sale, however, the program began reporting the correct depreciation values. In other words, there's a glitch in the program: A "Yes" answer to "Did you purchase/sell this property?" will be treated as a "Yes" to "Did you purchase/sell this property in 2021?", regardless of the dates actually put for purchase and sale.