Can I restart or import our rental depreciations after a one-year break from Turbotax?

[bfollowell]

I've used Turbotax for going on 20 years. Tax year 2020 things got a little more complicated, or so I thought, so we had someone do our taxes for us. Big mistake. It really wasn't all that hard and we paid a lot of money. Expensive lesson learned. Now I'm back but we have a break in our tax returns. I can't import anything from 2020 because we didn't use Turbotax last year. The main trouble I'm having is rental house depreciation that was already in place. This will be the third year for one rental, the second for another, and the first for the third. The third doesn't bother me because it's the very first year and it will be easy. The first and second rentals have nothing to pull from though, concerning initial cost, depreciation, etc., since I'm not importing, and I don't see a way to fill in that information so that we get the correct deductions & depreciation amounts. A friend suggested buying a cheap version of Turbotax Premier 2020 for $25 off ebay and "recreating" our tax return from last year as it was filed, then I can use that to import and start this year's. It sounds like it could work but it also sounds like a lot more work than should be necessary. Is there any better way to come back to Turbotax after a one-year break and have everything restart correctly?

Thanks.

[Carl]

It's actually simpler than you may think. But you do need the detailed printout of your 2020 tax return that includes "all" worksheets and calculation forms.

For the rental, you're looking for two IRS Form 4562's (two for each property).  They both print in landscape format. One is titled "Depreciation and Amortization Report" and the other is "Alternative Minimum Tax Depreciation Report". Most likely you'll only need the first one. But have the 2nd one available in case the program asks you for AMT depreciation amounts.

On the 2020 form 4562, for each asset add together the mounts in the "Prior year deprec" column and Current year depr" column. You'll enter this total in TTX 2021 where it asks you for total of all prior year's depreciation already taken.

Also, make absolutely certain the all your numbers agree with what you originally started with. Date placed in service, cost basis, any SDA taken on any listed assets, etc.

[bfollowell]

OK, I'll look for those. We have pdfs of the full return, and a lot of worksheets. I know the 4562s are there, but I don't recall seeing anything landscape. I'll look through and see what we actually received.

The other thing is, I don't recall TTX2021 asking me anything at all about prior year's depreciation already taken.

I'll look through and take it a little slower this time though.

Thanks!

[Carl]

The 4562 that prints in portrait format is the one that is actually filed with the tax return, and only if it's required. The ones that print in landscape have the detail you need.

Being that your 2020 taxes were done by someone else, the worksheet they used for the detail you need may be different. But basically, it looks like the one below.

I don't recall TTX2021 asking me anything at all about prior year's depreciation already taken

Assuming you entered everything correctly, especially the in-service date, the program will pre-fill in an assumed amount, and the box is editable so you can change/correct it if necessary.

[bfollowell]

Yeah, now that I see it, that looks familiar. I remember seeing it from previous TTX years. I don't believe I have those, but I'll double-check through my pdf return from last year.

Thanks.

[Carl]

If anything, your 2020 printout should have some kind of worksheet for each property that has the needed information on it. Otherwise, I'd just go with what the program assumes and pre-fills in for you.

Most tax preparers use software also for preping client tax returns. I would fully expect that sofware to figure things about the same. Though it's not uncommon to see depreciation off by a few bucks, and that's really no big deal if it is. a $5 difference in depreciation for year makes absolutely no difference what-so-ever to your tax liability anyway.

[AmeliesUncle]

Just be sure you are aware of any carryovers from last year, and make sure those are entered into the program.