Turbo Tax is adding a special depreciation allowance for the sale of furniture at my rental property.

[jfparks]

I sold some business property (furniture at a rental property) this year and instead of recapturing the depreciation to calculate the gain/loss TurboTax is adding a special depreciation allowance.  This is making my sale look like a gain when it should be a loss.  

Is there any way to override this?  

 The furniture was purchased in 2004 at $12,000, with 6,000 in depreciation.  I sold it for $1000.  

So I thought my loss would be - 12,000 + 6,000 + 1,000 = -$5,000.  

Instead it is saying I get an extra 50% special depreciation allowance this year, so the calc is -12,000 + 6,000 + 6,000 + 1,000 = gain of $1,000.

[TaxGuyBill]

TurboTax is correct, you do have a gain.

It is saying you claimed the 50% Special Depreciation Allowance in 2004, and your Basis is $0 (even if you had not claimed the Special Depreciation Allowance, the asset would be fully depreciated so your Basis would be $0).

In other words, you paid $12,000 for the item.  Since 2004, you have claimed $12,000 of tax deductions for it.  That makes your Basis $0.  So anything that you receive for it will be a gain.

[jfparks]

I see my issue, I never depreciated the remaining 50% after the special allowance in the first year.  I will need to apply that expense this year in order to get my books to reconcile to my taxes. Thanks!

[TaxGuyBill]

Do you mean add that expense to your 'books'?

If you did not depreciate it on your taxes, you can't just add the missed depreciation unless you go through the proper procedures (I would recommend a tax professional for that.