How to input bonus depreciation from Cost Seg for a rental property

[c0ach269]

Is there a way for 2024 TTX desktop to apply bonus depreciation for my 5 and 15 years assets of a rental property?  I have form 3115 that was done by a cost seg company and I need to apply these accelerated depreciation on 2024 tax return for rental property that was in business used in 2021.    

[AmeliesUncle]

You first need to change/add each of your assets to match the Cost Seg. 

Then as an "other" rental deduction, you enter the "Section 481(a) Adjustment".

To include Form 3115 and its attachments, I believe that you will need to file by mail.

[c0ach269]

You mean, adding another asset as 'other section 481(a) adjustment'  to input the remainder amount that was not calculated 100% deduction from the 5 and 15 yrs assets?  

Really appreciate your response. 

[c0ach269]

There are only 3 assets categories (Appliances, Land Improvement and Building).  If I add 'other' asset for the section 481(a) and do this for the Appliances (5 yrs) and another one for Land Improvement (15 yrs), TTX will do another straight line of the cost basis.  Instead of 100% of the remainder cost basis. 

[AmeliesUncle]

No.  Assets and the Section 481(a) Adjustment are two separate things.

You add each "asset" for depreciation to match the Cost Seg.  Five year assets, Seven Year Assets, 15 year, 27.5/39 year, etc.  When finished with that, your assets should reflect each separate item on the Cost Seg.  This basically allows you to depreciate the amounts that did NOT qualify for Bonus depreciation, and allows an entry for your to report any items that were sold/disposed.

As a separate thing, you enter an amount for the 'catch up' amount of depreciation.  That is the "Section 481(a) Adjustment".  When entering your expenses, there should be a place to enter "other" expenses.  That is where you enter the Section 481(a) Adjustment (the amount to 'catch up' on the missed/changed depreciation).

Be aware that if the property is a Passive Activity (most rentals are), some or all of the loss (due to the catching up on the depreciation) may be suspended until the Passive Activity has a profit.

[c0ach269]

Thank you @AmeliesUncle !

Now, I am confused as to how much I need to include in the 'Other expense' of Section 481(a) Adjustment.

Let's say my Cost Seg breakdown is as follow:

5 yr asset -> $20K

15 yr asset -> $6K

27.5 yr asset -> $150K after excluding land cost.

I will enter the following as depreciation for the tax return:

1. Depreciations:

5 yr -> cost basis $20K.   Current depreciation without bonus depreciation calculated by TTX, lets say $10K

15 yr -> cost basis $6K.  Current depreciation without bonus depreciation calculated by TTX, lets say $500

27.5 yr -> cost basis without land cost $150K.  Current depreciation without bonus depreciation calculated by TTX, let's say $5K.  

Let's say Form 3115 has the section 481a adjustment as $35K.   How do I calculate how much I need to fill out in the 'Other expense under 481a adjustment'? 

1. As it meaning the whole $35K or

2. Should I minus the 5 yr and 15 yr assets depreciation which were already calculated by TTX from the total $35K?  Meaning $35K - $10K - $500 = $24500? Or

3. Something else?