Investors & landlords

If you traded one property for two property you should follow the procedures previously provided.  If you want to set up two properties  because you now have two properties, (makes sense to more easily track if only one gets sold in the future) you can take the cost of the old property and split it in half.  

Steps to complete.

1. Go through the original asset and mark that it was removed from service (Sold, disposed of, etc).  
2. Enter the date it was removed from service. Do not select special handling.  Do not enter any sales price. This will allow depreciation for the period it was in service during the year. Write down the cost, prior and current depreciation as well as date placed in service.
3. Divide those numbers in half.
4. Add two rental houses/units the original date placed (property traded) in service to maintain the recovery period.  This is where it might get tricky if you don't have the TurboTax CD/Download.  If you do then you will need to go to the Asset Entry worksheet in Forms Mode to correct the depreciation amount for these two assets.  The chart for 27.5 year property is provided below so that you can use it to calculate the correct amount (Sep using year 1 to get the correct amount for 2021 only).  2022 will be automated correctly by TurboTax.
5. Finally, add any additional asset for any additional payment made for the the two new properties as a new asset placed in service in the month the trade was complete.