jimv123
Returning Member

Rental property depreciation

We purchased our AZ rental in 2004. The purchase price was $174,900. The cost basis calculated in Turbo tax is $141,273. My calculator says that this cost basis generates a depreciation amount of $5137 per year (141,273 X 3.63636%). However, Turbo tax has calculated $3853. Can you clear this for me and help me understand the difference? Thank you. 

Carl
Level 15

Investors & landlords

I take it you converted the property to a rental sometime in March of 2019. If so, you didn't read and heed the small print most likely. A lot of folks miss it.

Days of Personal Use - This will be **ZERO** days of personal use. The small print tells you that what you used it for *before* you converted it to a rental *do not count* for anything. So change your personal use days to ZERO.

Days rented - The day count starts on the first day a renter "could" have moved in. That's usually the day you put the FOR RENT sign in the front yard. It doesn't matter if it took you three months to get it rented. The "days rented" count starts on the first day a renter "could" have moved in.

 

jimv123
Returning Member

Investors & landlords

Actually, no. The property was always a rental...from day one in 2004.

Investors & landlords

What did you enter for "prior depreciation"?  Does it fix it if you leave "prior depreciation" BLANK?

jimv123
Returning Member

Investors & landlords

Great point. I will try to do that next. I will report back within 24 hrs. Thank you.