We converted our personal use home to rental property in 2019. I think TurboTax is incorrectly computing depreciation. Assuming (hypothetical numbers) original cost of rental property in 2016 was $150000, with cost of land being $50000. Property was changed to rental use in May 2019. Basis for depreciation is $100000 (assuming it is lesser than fair market value in May 2019). As per IRS publication 527's table 2-2d (MACRS GDS percentage table for residential rental property), the percentage for depreciation for property placed in service in May 2019 is 2.273%. This means depreciation deduction is $2,273.
On top of this TurboTax is computing depreciation for percentage of days rental property was used for business in 2019. Business use percentage is 67.12% of days (245 days). Which means, depreciation deduction as per TurboTax is $2273*0.6712 = $1525.71.
Why is TurboTax using business use percentage when table 2-2d has already accounted for the same?
Thanks!
