- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Get your taxes done using TurboTax
The problem you're experiencing is not with the program. It's with your interpretation of what the program is asking for. Overall, a bit more clarity in the program would help. I've got 3 rentals myself and have been using TurboTax since 2003. It figures depreciation each year to absolute perfection every time. So the problem is with your understanding of what the program is asking for, and it's no surprise as I see this all the time. So I will provide you the clarity you need, that the program does not provide. Below I will cover the actual rental property itself in the assets/depreciation section of the program. If you have other assets listed, then after my clarification of this item, it should help you with clarity on any other rental assets you may have listed on the IRS Form 4562 from your 2017 tax return. So lets begin.
For that specific rental property you will have two IRS Form 4562's in your 2017 printout. Both of them print in landscape format. One is titled "Amortization and Depreciation" and the other is "Alternative Minimum Tax Depreciation". You are mainly interested only in the first one. You only need to refer to the AMT Deprecation form if the program specifically and explicitly asks you for AMT depreciation information.
Now, elect to start/update the Assets/Depreciation section. If asked if you want to go directly to the asset summary, select YES and continue. This puts you on a screen titled "Your Property Assets".
On the Your Property Assets screen, click the Delete button next to each asset and delete all assets. We're going to re-enter them correctly. Once all are deleted you'll see no assets listed of course, and an "Add an Asset" button. Click that button.
- Select Rental Real Estate Property and continue.
- Select Residential Rental Real Estate, and continue.
- For "Describe the Residental Real Estate" enter the description exactly as shown on your 2017 form 4562 under the Asset Description column.
- Now add together the amounts in the "Cost (Net of Land)" box and the "Land" box, and enter that total in the program in the Cost box.
- Enter the amount in the "land" column of the 4562 into the program in the "Cost of Land" box.
- For the "Date purchased or acquired" box, enter the date you acquired ownership of this property. This date will "NOT" be on the 4562 usually, unless it just "Happens" to be the same date you placed the asset in service. Then click Continue.
- Select "I purchased this asset new" and select "I have always used this asset 100% for business".
- For the date you first started using it for business, enter the date under the "Date in Service" column on the 4562. Then click Continue.
- On the "Confirm your prior depreciation" screen there will be an amount already there. It "should" match. Basically, to determine your prior depreication already taken, on the 2017 form 4562 you have to add together the amounts in the "Prior Depreciation" and "Current Depreciaton" columns for that asset. If the program does not agree with "your" total, then you can (and should" change it to make it so. Then click Continue.
- On the Asset Summary screen click "show details" Here's what you should see.
Years to fully depreciate - 27.5 years.
MACRS Convention - Should match the *last* two letters on the 2017 form 4562 under the Method/Convention column.
Depreciation Method - Should match the *first* two letters on the 2017 form 4562 under the Method/Convention column.
Description - Should match what you have on the 4562 under the Asset Description column.
Cost/Cost Basis - will be the total of the Cost (Net of Land) and Land columns on the 4562.
Cost of Land - should match the amount in the Land column of the 4562.
Date I started using it in the business - should match the date Date in Service column on the 4562.
Business Use Percentage. Should match the percentage shown undder the "Bus. Use %" column of the 4562.
Sold/Retired from business in 2018 - I'm expecting you didn't sell or covert the property, so that should be NO.
Asset Category - I-Residential Real Estate (that's the letter "eye" not the letter "el")
Section 179 Deduction - $0
If all checks out, you're good to go with this particular asset. If it does not check out, then let us know what is different between what the program shows you on the details screen, and what the 2017 form 4562 says.
For that specific rental property you will have two IRS Form 4562's in your 2017 printout. Both of them print in landscape format. One is titled "Amortization and Depreciation" and the other is "Alternative Minimum Tax Depreciation". You are mainly interested only in the first one. You only need to refer to the AMT Deprecation form if the program specifically and explicitly asks you for AMT depreciation information.
Now, elect to start/update the Assets/Depreciation section. If asked if you want to go directly to the asset summary, select YES and continue. This puts you on a screen titled "Your Property Assets".
On the Your Property Assets screen, click the Delete button next to each asset and delete all assets. We're going to re-enter them correctly. Once all are deleted you'll see no assets listed of course, and an "Add an Asset" button. Click that button.
- Select Rental Real Estate Property and continue.
- Select Residential Rental Real Estate, and continue.
- For "Describe the Residental Real Estate" enter the description exactly as shown on your 2017 form 4562 under the Asset Description column.
- Now add together the amounts in the "Cost (Net of Land)" box and the "Land" box, and enter that total in the program in the Cost box.
- Enter the amount in the "land" column of the 4562 into the program in the "Cost of Land" box.
- For the "Date purchased or acquired" box, enter the date you acquired ownership of this property. This date will "NOT" be on the 4562 usually, unless it just "Happens" to be the same date you placed the asset in service. Then click Continue.
- Select "I purchased this asset new" and select "I have always used this asset 100% for business".
- For the date you first started using it for business, enter the date under the "Date in Service" column on the 4562. Then click Continue.
- On the "Confirm your prior depreciation" screen there will be an amount already there. It "should" match. Basically, to determine your prior depreication already taken, on the 2017 form 4562 you have to add together the amounts in the "Prior Depreciation" and "Current Depreciaton" columns for that asset. If the program does not agree with "your" total, then you can (and should" change it to make it so. Then click Continue.
- On the Asset Summary screen click "show details" Here's what you should see.
Years to fully depreciate - 27.5 years.
MACRS Convention - Should match the *last* two letters on the 2017 form 4562 under the Method/Convention column.
Depreciation Method - Should match the *first* two letters on the 2017 form 4562 under the Method/Convention column.
Description - Should match what you have on the 4562 under the Asset Description column.
Cost/Cost Basis - will be the total of the Cost (Net of Land) and Land columns on the 4562.
Cost of Land - should match the amount in the Land column of the 4562.
Date I started using it in the business - should match the date Date in Service column on the 4562.
Business Use Percentage. Should match the percentage shown undder the "Bus. Use %" column of the 4562.
Sold/Retired from business in 2018 - I'm expecting you didn't sell or covert the property, so that should be NO.
Asset Category - I-Residential Real Estate (that's the letter "eye" not the letter "el")
Section 179 Deduction - $0
If all checks out, you're good to go with this particular asset. If it does not check out, then let us know what is different between what the program shows you on the details screen, and what the 2017 form 4562 says.
‎June 7, 2019
3:25 PM
