Help with 27.5 yr depreciation calculation

[jjm_3]

On this vacation rental property, it seems the depreciation expense should be $7,838.  TT calculates it as $7,315,  over $500 difference.  I don't understand the TT calculation and wonder if I may have incorrectly answered a question a certain way on TT that caused this discrepancy.  Can someone help. Here's what I see on TT but they don't give any insight on how their depreciation expense number is calculated:

estimated expense - $7,315

Years to fully depreciate 27.5 

MACRS convention MM

Depreciation method SL

Cost/cost basis 493,333 (this is the original cost)

Cost of land 145,775

Date I started using in business 2/15/2021

Business use %  62.02%

Sold/retired in 2025  No

Asset category I - residential

Special deductions

Section 179  0

Sepcial Depn Allowance  0

[Mike9241]

it might be one of two reasons for this. 1) Change in business usage % where TurboTax thinks that too much depreciation was taken in the past or 2) there was an error in the depreciation taken in prior years. $7838 is correct. Based on what you provided (prior depreciation as of 12/31/2024 should be 30373 if 62.02% all years)

347558 depreciable portion divided by 27.5 times .6202 times 3.875 (year of depreciation from 2/15/2021 to 12/31/2024) 

If this is your situation. if deprecition is incorrect Turbotax will try to correct it and it will think its inc

[jjm_3]

Thanks.

The business % usage changes each year, so a different % is applied against the total depreciation each year.  That is normal for a vacation rental that gets some personal use.  The previous years, the % was in the range of 80%-85% depending on the year.  in 2025, we used it more so the % dropped to 62.02%. If there was an error in a previous year, TT makes no mention of it. 

To me it seems like TT is making an error or making an incorrect assumption, but I don't know how to fix it.  If I checked a wrong box on a question somehow this year or in the past, I certainly can't tell what it is.  It's not a huge amount of money but I worry the error will get bigger next year if not figured out.  I'm frustrated with turbotax right now. 

[AmeliesUncle]

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@jjm_3 wrote:

Thanks.

The business % usage changes each year,

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By default, TurboTax uses the mathematical method of depreciation.   TurboTax uses an order of calculations that results in the depreciation varying like that when the business percentage varies.  If that order of calculations is correct, the depreciation is correct.  Although the order of calculations may be debatable, TurboTax and many other tax software uses that same way, so I wouldn't be worried about it.

If you have the Desktop/downloaded version of TurboTax, you could access the "Forms" then the "Asset Entry Wks", then scroll WAY down to the bottom and check the box for TurboTax to use the "Tables" for depreciation.

[jjm_3]

Thanks for your help.  Now I understand.