Hi Carl (Catalyst V).
I thank you for this (final) post on this topic and figure that I probably owe you an apology.
My assumption has been that you were an employee/representative of Intuit/TurboTax, rather that a fellow (conscientious) user of their software and hence, some of the language and tone in my most-recent post were, under those circumstances, somewhat inappropriate, for which I am embarrassed and apologize.
In fact, as originally noted, your original post was prompt and informative/useful. In part, this led me to my incorrect conclusion about your identity.
I agree with your comment regarding the compounding nature of this “anomaly” and mentioned it myself, in one of my earlier posts.
As someone whose sole source of income is that from my single rental property, maximizing tax deductions is of paramount importance to me. Hence, my desire to obtain the greatest depreciation possible.
In fact, prior to 2016, I had been using the tax software produced by H&R Block and only started using TurboTax with an actual return in mind (I had used it previously only to cross-check H&R Block software), because I needed software that would accommodate rental property at a reasonable price. I am using the TurboTax 'Premier' product for this.
I do not think that fixing this depreciation problem in a subsequent year would be costly for the user, as they are potentially overpaying on their taxes, rather than the other way around.
It could be argued by some (although not those in my situation), that undervaluing depreciation could be beneficial since, by virtue of this undervaluation, the apparent “Land/Improvements” ratio is weighted more in favor of the “Land” component and may, consequently, reduce the likelihood of an IRS audit.
In addition, since the compounded depreciation is lowered, any tax-liability upon the eventual sale of the property may be reduced, depending on the individual capital-gains threshold applicable at that time.
However, I do not think theoretical benefits outweigh accuracy and, as I stated in an earlier post, if this condition is based on software inaccuracy (as I believe that I have identified), it becomes difficult to retain any confidence in the accuracy of the rest of it's operation.
Unfortunately, due to current circumstances, I do not currently have the time to obtain substitute software and make all the entries necessary to perform a cross-check.
It has been interesting corresponding with you, without which I would not have identified the actual cause of this problem – and, indeed, how to 'override' it.
Thank you again and goodbye.
