Depreciation Expense Transfer to Schedule E

[user17720701181]

TurboTax is calculating depreciation expense correctly for my rental real estate. However, schedule E shows zero for the depreciation expense line item. Am I doing something wrong?

[ThomasM125]

One possibility is you took the Section 179 expense option for your asset and you had a loss on the rental so it wasn't deductible in the current year. Another option is you entered the asset for the wrong business or rental by mistake, so it is showing on another rental or business schedule.

[user17720701181]

Thanks, but neither applies. I put two assets in service in 2023 and one in 2024, all relate to a single rental, my only activity with depreciable assets. No section 179 expense was taken related to any of the assets. TurboTax is calculating MACRS depreciation correctly, although nothing transfers to schedule E. It seems like a problem with the software. Any additional advice is appreciated.

[DianeW777]

If you would like to send us a “diagnostic” file that has your “numbers” but not your personal information it would help.  If you would like to do this, here are the instructions:  (Don't forget to give us the state)

TurboTax Online:

Open your return -Go to the menu panel on the left side of your return and select Tax Tools. 

1. Then select Tools below Tax Tools.
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent.
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.
5. Reply to this thread with your Token number and your state. This will allow us to open a copy of your return without seeing any personal information.

TurboTax Desktop:

If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:

1. Click on Online in the top left menu of TurboTax Desktop for Windows
2. Select 'Send Tax File to Agent'* > Follow the prompts to reach the token number.
   • Enter your email used for TurboTax > Enter your code > Send
3. Write down or send an image of your token number and state then place in this issue.
4. We can then review your exact scenario for a solution.
5. Please also tell us any states included in the return. This is necessary for us to view the return.
   • *If using a MAC, go to the menu at the top of the screen, select Help, then, 'Send Tax File to Agent')

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

@user17720701181 

[user17720701181]

Thanks so much for your offer, although things seem to be working on the new return that I just created. I appreciate your offer to help out.

With my previous returns (2024 and prior), which weren't done in TurboTax, all schedule E expenses were recorded in total and the loss (triggered largely by depreciation) was transferred to form 8562 where it was disallowed based on my income, due to passive activity loss limitations (my income is over $150k). For some reason on my first attempt at a 2025 return, TurboTax allowed all of the expenses except depreciation on schedule E and then failed to limit the loss based on my income. So, I had two issues, TurboTax was not transferring depreciation to schedule E and it was allowing a passive activity loss that should be disallowed based on my income. That's why I started over with a new return.

With the new 2025 return, I can see that TurboTax is reallocating my rental property expenses as either personal (based on my percentage of personal use of my vacation home rental property) or disallowed based on not letting expenses exceed my income from the property. So, the depreciation is still not showing up on schedule E, although I can see why my expenses are limited to my income from the property so that I don't show a loss. I can now capture the disallowed expenses for my passive activity loss carryforward, so that I can deduct them when we exit the activity (i.e., when we sell the property). I prefer to see the loss calculated on schedule E and transferred to form 8562, which was the case with my 2024 return, although the method used by TurboTax does get me to the right result.

Hopefully that makes sense. Thanks again for your offer to help out.