jtax
Level 10

Investors & landlords

First comment, be careful about what number the depreciation is based on. It appears from your numbers that you are depreciating the entire cost of the house. But you cannot depreciate the value of the land. Only the cost of the improvements (structures, etc.). See Q3 from this one way to calculate this: https://www.irs.gov/pub/irs-regs/depreciation_faqs_v2.pdf

 

If you did include the value of land, you should update your cost basis for this year to exclude the land value. You might want to amend your prior return if you are worried about the IRS catching that error, but you are under no obligation to file an amended return for an honest mistake. 

 

The 30-year life is probably for a different depreciation method. Why your property was MARCS 27.5 previously and now is ADS (30 yr) confuses me. But you might review your asset entry worksheet to verify that you didn't somehow accidently switch.

 

Re: the calcs being different. Note they are the same for the second year. In the first (and last) years depreciation is prorated by a "depreciation convention" based upon the date the asset was put into service. This is designed to prevent you from putting an asset into service on 12/31 and getting depreciation for the whole year.

 

But this is very complicated! It is possible you gave slightly different answers for the in-service date resulting in the slightly different depreciation amounts for the first year. Or the online calc might just be wrong. See http://www.loopholelewy.com/loopholelewy/02-business-deductions/car-expenses-08c-depreciation-conven... (about business equipment but you'll get the idea).

 

I would go with TT's numbers. They will stand behind the calculation if you have entered all the data correctly.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"