I'm trying to figure out how Turbotax is computing the depreciation on my vacation rental house. It comes up with a number that is similar, but not identical, to the number I compute.
Here's the information it's using:
cost: $515,819
land cost: $13,721
percent of business use: 72%
prior depreciation: $6,159
I compute the correct amount as: (515,819-13,721)*0.72/27.5 = $13,146
by subtracting the land value out from the basis, multiplying by the percentage of business use (the fraction of days of occupancy that are rentals), and dividing by the depreciation period for residential rental buildings.
Turbotax is computing $13,264.
I guess somehow the $6,159 prior depreciation is entering into the calculation, but I have no idea how. FWIW, the $6,159 was from last year, the year we acquired the property. We owned it for 0.7083 fraction of the year, and the business use percentage that year was 47.62%.
I even tried subtracting the $6159 from the basis and dividing by 27.5-0.7083 years, but that didn't give Turbotax's number either.
