Hello SUNM98TT. Will try to answer your question. This is how I see it, though am far from being an expert on this. Believe you can call the Turbo Tax Helpline and see if you can get a CPA or Enrolled Agent to help you. Interested in hearing from anyone if the below sounds correct or not. Hope this helps.
1) You will need to count the depreciation for your relinquished property's assets and include those in your Schedule E and the Adjusted Basis Basis calculations for the relinquished property
2) You get the depreciation for the relinquished property by putting in the sold date of 5/21. TurboTax automatically calculates the depreciation for you.
3) OK, here is where the fun begins. Using the Asset Entry Worksheet ...
a) Calculate the what the depreciation would be for the asset if you had not sold the property. Can do this by taking out the sold date that you entered in the Turbo Tax asset entry sheet
b) Have Turbo Tax calculate what the depreciation would be if you put in the sold date of 6/29
c) Then, Full Year Depreciation less Depreciation from Jan 1 thru Jun 29 = Depreciation from Jun 20 thru Dec 31st. At least it seems to for me.
d) Remember to put back in the correct sold date of 5/21 for the Relinquished Property
4) For your Replacement property, create the "carryover" asset with the original data that matches the data for the Relinquished Property. In the Asset Entry Worksheet ...
a) For Prior Depreciation, put in the depreciation taken through 2019 (should be the same as for the Relinquished Property)
b) For Depreciation Deduction, do an override and enter the number that you calculated in step 3c above, the depreciation amount for June 20 through Dec 31st
c) Regarding the AMT numbers in the Asset Entry Worksheet, because we are not close to any AMT issues, we use the same numbers as those in step 4b. You will have to figure out what you want to do for yourself regarding the AMT numbers.
5) The gotcha if you fall asleep! When you do your 2021 taxes, you need to make sure to get the PRIOR DEPRECIATION correct for the "carryover" asset. Because Turbo Tax will ONLY carry forward the depreciation from the Replacement Property "carryover" asset. You will have to manually add the 2020 depreciation for the asset from the Relinquished Property from Jan 1, 2020 through May 21, 200, to the depreciation for the "carryover" asset that Turbo Tax carried forward from Replacement Property to get the correct Prior Depreciation for that "carryover" asset for your 2021 taxes. I do that manually outside of Turbo Tax in a spreadsheet and then enter the number in the Asset Entry Worksheet's Prior Depreciation field. Turbo Tax will then calculate the asset's depreciation for 2021.
Good luck to us all!
