Carl
Level 15

Investors & landlords

A property tax bill is for acertaining and determining property taxes ony, and nothing else.

TurboTax utilizes the property tax bill only to determine what percentage of your purchase price is allocated to the land, and that's it.

So if the property tax bill values the entire property at $100,000 and values the land only at $25,000, then 25% is allocated to the land with 75% to the structure.

So if you paid $500,000 for the property, 25% of that ($125,000) is allocated to the land.

 

Foreign *RESIDENTIAL* rental property is depreciated over 40 years if it was place in service in 2017 or earlier. It's depreciated over 30 years if placed in service in 2018 or after. So you're making some wrong selections somewhere in the program if you're getting 37 years  for anything on residential rental property.

 

If you've been using TurboTax since you purchased the property, more than likely you have been depreciating it, and more than likely it's been done correctly over 40 years since you purchased it in 2016.  Simply look for the IRS Form 4562 on your 2018 return that prints in landscape format and is titled "Depreciation and Amortization Report". You should see an amount in the "Current year depr" column and the first two years of depreciation in the "prior year depr" column.

However, if you have not been depreciating the property or have been depreciating it incorrectly, you can't simply take 3 plus years of depreciation in 2019. Doesn't work that way. You have to amend your past tax returns starting with the 2016 return and work your way forward to 2019.

Your 3 year time to amend your 2016 tax return ends on July 15th, 2019. After that date, amending will not be an option. You'll have to just include IRS Form 3115 with your 2019 tax return to correctly "fix" this. Now the TurboTax program does include the IRS Form 3115. But I can tell you right now that this form is *NOT* simple by any stretch of the imagination. I would *HIGHLY* recommend you seek professional help for this. Doing the 3115 wrong will just put you in a never ending nightmare with the IRS from which you will never awaken. The fines, penalties and late fees you'll be assessed will make the cost of professional help seem like a pittance in comparison. On top of that, if your state taxes personal income you can expect to double those fines and penalties.