Why does TurboTax calculate my rental depreciation as $1,862 instead of $4,063? I have $223,466 in depreciable value and rented for 158 days in 2024.

Forum|Forum|1 year ago
February 2, 2025
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I have $223,466 in depreciable value, which results in $8,126 of annual depreciation based on a 27.5-year schedule. In 2024, I lived in the home for 158 days, it was vacant for 50 days, and it was rented for 158 days. Based on this, I expected a depreciation deduction of $4,063, calculated as $8,126 × (158 days rented / (158 days rented + 158 days used personally)). However, TurboTax is showing a deduction of $1,862 instead. How is TurboTax determining depreciation in this case?

AmeliesUncle

@mimi789 wrote:
In 2024, I lived in the home for 158 days, it was vacant for 50 days, and it was rented for 158 days.

Was it originally only for personal use, then you converted to be a permanent (one year or more) rental? Or do you go back-and-forth between personal and rental?

What date was it "placed in service"?

mimi789Author

It was converted from personal use to permanent rental only once. I stopped using the home for personal use on 6/7/2024, stayed vacant till 7/25/2024 and then I put it for rent on 7/26/2024.

Hopefully this helps.

AmeliesUncle

Don't enter your personal days. That is only used for personal days AFTER it was converted to a rental (generally when you go back and forth between rental and personal).

When you enter the "placed in service" date (the date it became AVAILABLE to be rented), that already prorates the depreciation. If it was in July, you would get 5.5/12th's of a full year of depreciation (the first month is a half month, regardless of the exact date).

For your deductions, you will need to only enter the amounts that pertain to the rental period. That means you usually need to MANUALLY prorate some of the expenses, such as insurance, real estate tax, etc.