Installed new roof on rental property on 07/1996 and started to depreciate it using 27.5 year straight line method as dictated by IRS. That roof failed and had to install a new roof on 06/2016. Will depreciated new roof using same method. But how do I recover the depreciation from the roof that was replaced (07/1996) and not fully depreciated?
Since the old roof is no longer part of your Rental Property, report that you stopped using the asset (see screenshot below - click to enlarge). Report a sale price of zero. This will generate a loss on the disposal of your asset. Since you held it for more than one year, this will be a capital loss.
I have a similar situation and have followed the advice above in TT. In your answer above it states: "This will generate a loss on the disposal of your asset.” I can’t see where in TT this loss shows up, nor do I see it on my draft 1040 form as line 13 (capital loss) remains blank? Where in TT does TT generate the capital loss for this “disposed of” asset?
I have a similar situation and have followed the advice above in TT. In your answer above it states: "This will generate a loss on the disposal of your asset.” I can’t see where in TT this loss shows up, nor do I see it on my draft 1040 form as line 13 (capital loss) remains blank? Where in TT does TT generate the capital loss for this “disposed of” asset?
Casualty losses are reported on Form 4684 and carry over to Schedule A. If you do not have enough itemized deductions to use Schedule A, the casualty loss is not deductible.
Thank you for the response. In my case, I do have enough deductions to qualify to file Schedule A and in addition, I do not see a Form 4684 generated by TT. I did read something that advised that I claim this unrecoved expense amount via the Business Expense —> Sale of Business Property dialog in TT. Using this approach, I enter the cost of the item, the deprecition taken to date, and a sale amount of 0. This causes TT to generate a capital loss of for the asset n the approprate amount. This seems likenthe correct process to use, but I have some doubts as I would have thought TT would hve generated this for me. Please advise if I have this correct.
How do I recover the balance of depreciation on my old roof when I replace it, the remaining 15 years
Casualty losses are reported on Form 4684 and carry over to Schedule A.
Apparently, I'm not understanding something. How is this a casualty loss? Per your prior post in this thread, you instructed that it be reported as a sale with a sale price of zero. So as far as TTX is concerned, the asset was sold at a loss. It's not a casualty loss.
It's my understanding that when you report the sale of the asset at a loss and the sale does not include the sale of the entire property and all of it's assets, the remaining depreciation not yet taken is suspended until the "entire" property is sold. I don't know off the top of my head what forms this carry over loss shows on though.
@Carl ,
Only @jkenned9260 is a current question. They are adding on to a 5 year old discussion.
@jkenned9260 wrote:
How do I recover the balance of depreciation on my old roof when I replace it, the remaining 15 years
If the roof was part of the property when you bought it, you don't get anything when it fails. You just list the new roof as an asset and start depreciating it.
If the existing roof is already a replacement and already listed as a separate asset in Turbotax, you will report that you disposed of the asset (it wore out, had zero value). That will allow you to roll up the remaining depreciation. Then list the new roof as a new asset.