Investors & landlords

One property was placed in service in 2017 and the other in 2014.

Legally speaking, what you need to do is file IRS Form 3115 to fix this. Now while the TTX program does include that form, it does not include any help for that form. The 3115 is not simple by any stretch either, and I always advise folks to seek professional help for dealing with the 3115. Of course, that completely defeats your desire to start doing your taxes yourself then, and you still end up paying another CPA to fix the mistakes of the previous CPA.

Now the monetary difference between 25 year depreciation and 27.5 year depreciation probably isn't all that much in "the big picture" of everything. We're talking 6 years of incorrect depreciation on one property and 3 years on the other property. Basically, you took to much depreciation in those years.

What I would do, even though it's technically not the correct thing to do, is to just enter each property into the 2020 TTX program using the original in service dates. When you do that, the program is going to "assume" the amount of depreciation taken in prior years, based on a 27.5 year depreciation schedule. You can then change that "assumed" amount to the actual amount taken. Then the program will adjust the current, 2020 tax year depreciation accordingly.

My bet is, on the SCH E for both of those properties you showed a loss on line 22 of the SCH E every year the property was in service. I'm betting that by doing the above, even with the reduced amount of the 2020 depreciation, you will still show a loss on line 22 of the SCH E for both properties.

So do I put the roof depreciation in the same form 4562 with the existing depreciation for the property

Yes. As you work through the Rental & Royalty Income (SCH E) section of the program, after dealing with Property Profile, Rental Income, and Rental Expenses, you'll elect to start/update the assets/depreciation section. In this section is where you'll enter the property itself using all the same numbers and dates from the 2019 form 4562. (See below to ensure you pull your data from the correct 4562.)

After you add the property itself, simply click the "Add Another Asset" button and enter the new roof. Of course, the "in service" date for the new roof will be whatever date in 2020 the installation of that roof was completed and depreciation on that roof will start on that in service date. It too will be depreciated over the next 27.5 years.

In your 2019 tax return printout, you should have two IRS Form 4562's for each individual rental property you own. Both of these 4562's print in landscape format. One is titled "Depreciation and Amortization Report" and is the one you will need for enter the asset into the TurboTax program.  The other one is titled "Alternative Minimum Tax Depreciation Report". You will only need data from that one if the program specifically asks you for AMT depreciation information.

Take note that I am assuming that you have no dollar amounts listed under the Section 179 column, or the Special Depreciation Allowance column on either 4562. If you do have a dollar amount listed there for an asset and need help with entering it correctly in the TTX 2020 program, just let me know.

If under the "description" column you have an "amortization" item there with financing fees listed under it, let me know if you need help in entering that correctly in the TTX program also. Amortized assets are not entered the same way as other assets are entered. You have to "know" how to enter them correctly, and the program is not all that intuitive in doing that for your specific and explicit situation.

Finally, in TTX 2020 when entering the amount of prior depreciation taken on an asset its important to enter the "correct" amount here. To get the correct amount take a look at the 2019 form 4562 "Depreciation and Amortization Report" for that property. On the 2019 form 4562 you add together the amounts in the "prior years depr" column and the "current year depr" column, to get the total amount of prior year's depreciation taken, for the 2020 tax return.