I DO have an "asset" for the land in TT; the cost was set to 0, which makes a certain amount of sense because it ensures that I've never claimed any depreciation on the land.
First, work through the existing property asset. Write down the following information:
- Your cost basis of that particular asset
- The "in service" date of that asset
- The total amount of depreciation taken in prior years. Note that this figure will *NOT* include the 2021 depreciation. Only the the total of all depreciation taken in 2020 and all prior years.
Now, on paper add your land cost to the cost basis and get that total.
Enter a new asset in the Assets/Depreciation section. It gets classified as residential rental real estate.
When asked, enter the "original" in-service date you wrote down about.
COST - Enter the total cost you paid for the property. The total entered here will include the cost of the land.
COST OF LAND - Enter your cost of the land.
Date placed in service will be your original date you wrote down above.
Take note that the program (Not you) will subtract the cost of land from the cost to determine the structure cost to be depreciation.
Somewhere in there you'll be presented the total amount of prior depreciation already taken. The total amount of prior depreciation should equal what you wrote down above. If it's within $5 (I'm confident it will be) you can just leave it, or you can change it if you'd like it to match exactly.
On the summary screen elect to view the details. Everything should pretty much match up and be what you expect. If it is, then you can delete the other asset entries for the structure and the land.
When you view the 4562 in forms mode you'll see the property itself listed along with an amount in the "Cost (Net of Land)" column which is the structure value being depreciated, and an amount in the "Land" column which is the value of the land. Also, the "Prior years depreciation" column will have that total in it, and the "current year Depr" column will have your 2021 depreciation amount in it.
At this point, the current year's depreication will show a full year's depreciation because you have not yet reported the sale of the property.
Do/confirm all the above, and I'll provide you guidance on reporting the sale, so as to make it easier/simpler for you.
