Investors & landlords

both state it correctly as 11/01/09

My screen indicates you're using the CD/Desktop version of Home & Business. If so, the first thing I want you to do is make a backup copy of the .tax2020 file located in the documents/turbotax directory. That way, due to my lack of knowledge of 1031 exchanges, if what we do makes things worse, you can go back and I'll bow out of this thread gracefully. I pretty much "know my stuff" for the assets section. But when it comes to 1031 exchanges, I typically stay out of those threads.

Since you have the 4562 titled "Depreciation and Amortization Report" that prints in landscape format from the 2019 return, you have all the information you need to just delete the asset completely from the 2020 return, and re-enter it anew. There is one caveat though, so that you get the "prior depreciation" number correct on the 2020 tax return. First, we'll enter the asset as a "new" asset on the 2020 return and confirm it's right. Once confirmed, you can then just delete the old entry.

- As the bottom of the Asset Summary screen click the Add an Asset button.

- Select Rental Real Estate Property, then continue.

- Select Residential Rental Real Estate, then continue.

- For Describe this residentail real estate, enter "exactly" what the name of the asset is on the 2019 forum 4562 in the Asset Description column.

 - In the COST box, add together the amounts in the Cost (net of land) and Land columns for that asset. Enter the total in the COST box.

 - In the Cost of Land box, enter the amount in the "Land" column (if present) for that asset.

 - In the Date Purchased or Acquired box, enter the date you purchased or acquired this asset. It doesn't matter if this date was before you made this asset a rental asset. But this date must be the date of conversion to a rental asset, or before. This date is not used in figuring your depreciation anyway.

- Click Continue to go to the next screen.

- Select "purchased new" and select "always used this item 100% for business.". For the date you first started using it in this business, enter the date shown on the 4562 for this asset in the "Date in Service" column. Then continue.

- On this screen, you should see the total of all prior year's depreciation already taken. That number does "not" include your 2020 depreciation. That number "is" correct if all the data entered up to this point was correct. If you have no qualms with this and it "is" correct (may be off by a few bucks, but it's really not a big deal if so) then you can continue.

Now click the "show details" and lets do a comparison of the information presented, with the information on the 2019 form 4562.

Years to fully depreciate - This should match the number under the "life" column of the 2019 form 4562

MACRS Convention - These two letters should match the two letters to the "right" of the slash mark in the Method/Convention column on the 2019 form 4562 for that asset.

Depreciation Method - These two letters should math the two letters to the "left" of the slash mark in the Method/Convention column.

Description - This should match exactly, what's in the "Asset Description" column for this asset.

Cost/Cost Basis - This amount should be the sum of the amounts in the "Cost (net of land)" column and "Land" column. (Note that typically, only the property itself has an amount in the Land column.)

Cost of Land - This amount should be the same as the amount in the "Land" column

Date I started using it in this business - This date should match what's in the "Date in Service" column.

Business Use Percentage - This number should match what's in the "Bus. Use %" column for that asset.

Sold/Retired from business use in 2020 - This of course, will not be shown on the 2019 form 4562. If you entered the asset as I instructed, this asset will show NO. I don't know what happens with this with a 1031 exchange, if it gets changed to YES  or whatever.

Asset Category - This is not directly reflected anywhere on the 4562. But for an asset classified as residential rental real estate, its "I - Residential Rental"

The last two now:

Section 179 Deduction - This should match what's in the "Section 179" column of the 4562. Take special note that "residential" rental real estate and it's associated assets "DOES NOT" qualify for the SEC 179 deduction.  This is not true for "business" rental real estate. SO don't get confused.

Special Depreciation Allowance - Some assets for residential rental real estate "does" qualify for this SDA. That number is shown on the 4562 in the column labeled "Special Depreciation Allowance"

Okay, so lets see if the above helps make things right now for "at least" one asset at this point.