Thank you for the thorough reply. Following-up:
Question 1:
To keep things simple, it looks like I can just keep track of the amount I depreciated each year. If I sell the house, I would just enter the total amount I depreciated during the ownership of the property to make sure the IRS recaptures the depreciation. The IRS form only asks for the total amount you could / should have depreciated the property.
Question 2:
This post seems to suggest that you can still have 100% of the capital gains tax exclusion if you meet the criteria, but obviously still have to pay back the depreciation recapture. https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/can-i-still-be-exclud...
Question 3:
I tried doing an amended 2021 return through TT online (I have an OS where the download version isn’t supported). I ran into two bugs when trying to do an amended return which were confirmed by two representatives. Apparently there’s no way to get notified about the correction status, and I have no other way to do an amended return.
Bug 1: As soon as you enter anything other than 0 for the land value for your property, TT online lumps the entire cost of the property and land value into land value, and sets the property value to 0! This bug is confirmed by two reps.
Bug 2: There is no way to set a percent time the asset is in service. I owner the property 5 months of the year, but it forces depreciation for the entire year because of the missing option to set ownership days for asset. You can set ownership days for the expenses, but NOT the asset depreciation. This bug is confirmed by a CPA rep I spoke to this morning.
I’m wondering if there’s some way to track a status on these bugs so I know when I can do my amended return?
Question 4:
There is an open kitchen and living room, of which I don’t use the living room area and tell my tenants they can have that area. I don’t see why I couldn’t add in that square footage then, correct?
Question 5:
It seems like splitting utilities based on the number of tenants sharing the utilities makes more sense, and would give you a higher deduction generally than square footage, but the question would be, as you said, any period of times through the year that it is not rented. So, if I have 2 tenants along with myself, I could deduct 66.6% of each one of those bills for the time they are there. It seems like I would deduct nothing for the time that they aren’t if I choose this method?
Question 6: There turned out to be yet another confirmed bug this morning when I was talking to the CPA rep. Last night when I went through the error checking, TT warned me about a missing percent of area rented. I entered 50%. After I did that TT went and screwed up all my expense numbers for my property and I had to re-enter everything.
When I started my taxes, when asked if I wanted TT to divide the rental-related portion of the property, I had chosen “No, I’ll do the math and enter only the rental-related portion”. So, TT shouldn’t have gone and changed anything. The rep and I went back to the spot where my question was, and it was still set at “No, I’ll do the math and enter only the rental-related portion”. We changed it to Yes, and the 50% number that TT forced me to enter when doing the error checking, showed up here! So, it was applying the 50% to what I had entered even though I had selected “No”.
