How do fully expense out the remainder of an amortized intangible asset? I need to expense out a terminated lease commission.

[jasonrimel]

I have an asset on my Form 4562 for the lease commission paid for a 5 year lease.  The lease terminated this year (year 2).   I need to fully expense out the remainder of this intangible asset to bring it to zero.   In TurboTax, I listed the asset as "sold" and the put the date the lease terminated.   I then selected "yes" to the special handling question.   However, TurboTax is only pulling in the amount of the amortization for 2021 and it is not including the remaining portion that needs to be expensed.   There is note in turbotax that says you may need to override in the form.   But no other information is provided.   Any advise on how to best handle this in TurboTax?

[Carl]

DEDUCT FINANCING FEES OF OLD LOAN WHEN REFINANCING

In the Assets/Depreciation section for that rental property, elect to edit/update the entry for your points.

- On the "Review Information" screen click Continue.

- On the "Did you stop using this asset 2021?" screen, click YES.

- On the "Disposition Information" screen, in the disposition date box enter the date you closed on the new loan. Then click Continue.

 - On the "Special Handling Required?" screen, click YES.

- On the "Depreciation Deduction Amount" screen, select Transfer These Fees For Me To Other Expenses. Then click Continue.

You'll see the remaining fees of the old loan to be deducted in the Rental Expenses section, very last screen of that section. The entry will start with "Unrealized Refinancing Fees...."

[ErnieS0]

Why did you select Yes to Special Handling Required? If you select NO TurboTax will allow you to enter the sales price and sales expenses and compute a gain or loss.

You would enter $0 to fully expense out the remainder of the asset.

[jasonrimel]

I had previously seen this help response.   This process worked up until the last step.   After I select Yes on the special handling required screen, the next screen only pulls up the amortization expense for the partial year (up to the termination date).  It is not giving me the option to transfer the unrealized portion to other expenses.   The unrealized portion is also not being captured in the other expenses of Rental expenses.    Any ideas?

[jasonrimel]

for intangible assets, TurboTax guidance advises to select Yes for special handling.     

If I selected a sales price of 0 (even though nothing was actually sold) would it just expense out the remainder of the unrealized portion essentially as a loss?

[Carl]

The unrealized portion is also not being captured in the other expenses of Rental expenses. Any ideas?

After you finish working it through per the guidance, just manually enter it as a miscellaneous expense yourself. The misc expense section is "THE" "VERY" "LAST" thing you see in the expenses section, "AFTER" you deal with the mortgage interest section "IF" presented.

[jasonrimel]

Perfect, thanks.  I'll just manually add in the unrealized portion in the misc expense.