Carl
Level 15

Investors & landlords

On the SCH E, if you identify that portion of the property as commercial rental real estate it will depreciate it over 39 years. But the problem with that, is that portion is already included in the cost basis on the SCH C. So you'll be double-dipping on the depreciation, which is not correct.If you change the cost basis on the SCH C by the amount you assign to the portion of property on SCH E, that will screw up the depreciation on SCH C for the current year and all future years. The change of cost basis on the SCH C will be treated "as if" that was the original cost basis when placed in service. The program will "see" that you took to much depreciation on that changed cost basis in past years, and will incorrectly adjust the depreciation for the current and all future years.

That's a problem that I don't see any way to overcome using TurboTax.