Do I correct prior returns if I forgot to exclude the land value from my cost basis when I started depreciating my rental property in 05 using TT? I've over depreciated.

[Moxam1]

I've over depreciated, but I haven't exceeded the allowable.

[KarenJ · Accepted solution]

For the 2017 tax year, go ahead and correct the basis now, so the current and future tax returns are correct.  Also, enter the correct "prior depreciation", the amount you should have taken.

Using the wrong basis in prior years can only be corrected by amended returns, and you can only amend up to the 3 prior years.

 For 2017, you may want to consider switching  to TurboTax Desktop, which would allow you to view and make changes to the Asset Entry worksheet which shows all the information used for the depreciation calculations

If you started your 2017 return in TurboTax Online and want to switch to the TurboTax software, here's how.

1. Save your online return as a tax data file.
2. Sign out of TurboTax Online.
3. Install your 2017 TurboTax software.
   • If you have not purchased TurboTax Desktop software, click here to select the product you need to complete your return.
   • Important: If your return includes a state, make sure you also install the corresponding state program(s), otherwise you'll get Error 539.
4. Once installed, choose File > Open Tax Return in the software program.
5. Browse to where you saved your .tax2017 file and click Open.
6. If you get an error, delete your tax data file and repeat these steps from the beginning.
7. (Optional) Once you've confirmed that your online return opens properly in the software, you can clear your online return.