Rental depreciation of property

[Cat_Sushi]

I entered in everything into TurboTax and thought it was fine, until I looked back and it didn't seem like it made proper depreciation calculations.

1) bought house Jan 2022

2) planned to rent out for the whole year, but we only rented it out for 1.5 months due to repairs and such in the summer

3) i put personal use days as 5 days total for 2022

I did depreciate the roof/windows etc and those calculations are fine. But for whatever reason TT did not calculate in the depreciation of the house itself? What's the best way to adjust, assume amended return for 2022, which is fine, but I'm just not sure what I did or didn't do to make TT not factor in the cost of the house. It did ask the question and I did put the total cost of home.

Also reading that maybe I need to exclude land and only the building itself should be depreciated? What's the right number to use for depreciation?

[AmyC]

1. The property profile is probably where you entered the cost. You have to enter the house in the asset section where you entered the roof and windows.

2. Land does not depreciate. 

3. The program will ask how much you paid, enter the total paid. On the same screen, it will ask for the land value. Then the program will subtract the land value to calculate the basis for depreciation.

See: 

• how to file an amended return. 
• I need to amend my state return.
• Real Estate Tax and Rental Property.
• Rental Property Deductions You Can Take at Tax Time

[Cat_Sushi]

Thank you that's helpful. Does it matter in terms of my intent on use? There was a period where we wanted to treat it as a vacation home until everyone returned to work and we then planned to just rent out instead. I believe there was a question of some sort related to that. 

Also, as I already had a loss carry over, this should not impact my taxes owed at all as I am likely only to add to the depreciation loss being carried over?

[AnnetteB6]

Since you are reporting your 2022 taxes, answer the questions and enter your information with regard to what the actual use of the property was, not what you intended it to be at some point in time.  

You are correct in that if you already have a passive loss carryover from your originally filed return, amending to include the depreciation of the house itself will only add to that carryover.  It should not change your bottom line return at all.

@Cat_Sushi 

[Cat_Sushi]

Great, I have gone ahead and updated my depreciation assets and was about to submit but have a few more questions.

1) It doesn't look like I can efile my 2022 amendment for federal online right now, and TT wants me to print and mail it in instead. Is it because it's not even past 4/15 due date yet? Should I wait to file amendment in May/June if there's an e-file option that would come up later, or do all Federal amendments now need to be mailed in either way? As it is not impacting any taxes owed or due with this change, doesn't seem like I need to rush it in, but as long as it's done within this year.

2) looks like CA amendment is available to file electronically now. Does it matter if I have not submitted my federal amendment yet, but submit CA amendment first?

3) For Federal amendment if I'm mailing it in, do I need to provide support of the worksheet calculations on how much I am depreciating or send a copy of property bill or just simply print and mail in the suggested forms only from TT amendment if online would not be an option?

Thanks!

[MarilynG1]

You should be able to Efile your Federal and California Amended returns.  Does TurboTax give a reason you can't Efile?

Yes, you can Efile your CA Amended return separately.

No, depreciation on real estate is calculated by the Cost  Basis you entered and Date Placed in Service.  This is calculated automatically, so you don't have to provide proof of calculations. You could save your Property Tax bill showing % allocated to Building/Land.  You could also save documentation on how you arrived at your Cost Basis (which is usually what you paid). 

@Cat_Sushi 

[Cat_Sushi]

Thanks for confirming. No it didn't say why I can't file. 

The screen I have only says all returns other can CA need to be mailed vs filing online. Steps it gave on single screen was 1) print and mail in (Federal return pdf was generated for me to mail in). Then step 2) and 3) was around clicking "continue" to file my CA in electronically. Which is why I'm wondering why I can't do the e-file for Fed. Any insights would be great. I can post the screen if helpful as there's no personal info there. 

[DaveF1006]

It would be helpful to have a TurboTax ".tax2022" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions: 

If using Turbo Tax online:

1. Click on Tax Tools in the black left menu bar
2. Click on Tools>share my file with agent
3. press ok and you should get a token number

At the top menu in the black line at the top of the page go to Online. 

1. From the menu, select Send Tax File to Agent. 
2. You will see a message explaining what the diagnostic copy is. Click Send and then you will get a Token number. 
3. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.