The way I manually computed the depreciation is as follows:
I took the cost of land and divide it by 27.5.
You have used what the IRS calls an "impermissible method" to compute depreciation. Since you did this for more than 2 consecutive years you will need to file IRS Form 3115 to fix this. While the TTX program does include the 3115, it is *NOT* simple by any stretch of the imagination. Therefore, you should seek professional help. This is especially important if your state taxes personal income, because this is going to be a double-whammy for you. By all means, please seek professional help.
While possible, I doubt you'll be able to get time with a CPA before the Apr 18 tax filing deadline. So you may want to file an extension. Keep in mind that only gives you an extension to file. It does not give you an extension to pay, if any taxes are due. So if you think you may owe taxes, you still need to make an estimated payment before the Apr 18 deadline. You can pay on line if you want, and need to, at www.irs.gov/payments. ***PRINT YOUR RECEIPT!!!***
Three things to keep in mind here when dealing with the IRS:
1. You are guilty until proven innocent.
2. The burden of proof lies on the accused (that would be you), and not the accuser.
3. If it's not in writing, then it did not occur.
So I stress again, PRINT YOUR RECEIPT regardless of the method you use for paying any estimated tax due, if you deem an estimated payment necessary.
The correct way to figure depreciation for residential rental real estate:
IRS Publication 946 at https://www.irs.gov/pub/irs-pdf/p946.pdf
Use the MACRS worksheet on page 36.
For line 6 of the worksheet, table A-6 on page 71 applies.
For line 7, it's the cost basis of the structure only, as the value of the land is never depreciated.
