Depreciating a rental roof over 39 years instead of 27.5

[InnovateMoore]

Turbo tax is depreciating a rental roof over 39 years instead of 27.5. Why is that, and how do I change it? It is in the program as a residential asset not commercial.

[Anonymous_]

Where are you entering the information in the program? Also, what type of return are you preparing?

If you are using the Rental Real Estate tab, make sure to select Residential real estate, not Nonresidential real estate.

[InnovateMoore]

Thanks for the reply. 

I'm entering it in the "Rental Real Estate" section.   My choices are:

- Land Improvements

- Residential real estate

- Amortized Intangibles

-Nonresidential real estate

- Qualified Improvements

- Roofs/HVAC/Fire (I'm choosing this one)

- Other

[Anonymous_ · Accepted solution]

Choose Residential real estate since that will give you a 27.5-year recovery period.

[Sue2843]

I chose that one (Roof/HVAC/FIRE etc) for the simple fact that it states HVAC and it is depreciating over 39 years instead of 27.5!  How do I change this in Turbo Tax when I bought this in 2024 and am now working on 2025 taxes??  Didn't catch it last year!  I don't care about what I missed out on last year but want to correct it going forward.  I'm thinking we should have used -Qualified Improvements category??  WHY does it say HVAC if that's not where we should put it??

[JamesG1]

Perhaps, there was just awkward wording.

The IRS would tell us that the 2024 income tax return should be amended with the asset correctly depreciated over 27.5 years.

Then, the corrected 2024 income tax return would carry forward to the 2025 income tax return.

You may want to file the 2025 income tax return with the asset depreciated over 39 years and then amend both 2024 and 2025 income tax returns after April 15 without the pressure of the deadline pressing upon you.

IRS form 3115 Application for change in accounting method can catch up both 2024 and 2025 but it is a difficult form to manually prepare.