In 2015, I filed a sched E and depreciated my rental prop. on sched E. On Jan 1, 2016, I began using that home as an office (diff business).

[judithadriscoll]

In 2015, I filed a sched E and depreciated my rental prop. on sched E.  On Jan 1, 2016, I began using that home as an office (diff business).  I need to transfer the remaining depreciation from schedule E to schedule C on my 2016 taxes.  1) Where do I find the correct remaining depreciation amt to transfer?  3) Where do I put it on schedule C?  

[PatriciaV · Accepted solution]

If you used TurboTax last year, look for Form 4562 Depreciation and Amortization Report and Alternative Minimum Tax Depreciation Report. (Similar reports are used by other tax preparation methods.) The total of Current and Prior Depreciation from last year is the total Accumulated Depreciation (or "prior depreciation" when entering a new asset). You will need both regular and AMT depreciation from last year.

First, report that you converted your rental property to personal use. This will prevent any future depreciation expense for this property. If you did this last year, you can simply delete the property from your return.

Next, add the property as a Business Asset Being Depreciated from the Business Summary page.

The easiest way to find this section in TurboTax is to use the Find/Search box at the top right side of the TurboTax header. Enter "schedule c", hit Enter, then click on "jump to schedule c". This will take you directly to the start of this section. 

From the list of businesses you have entered, click Edit beside the company you need to work on, or Add a Business.

Follow the prompts to the Business Summary page, scroll down to Business Assets and click Start/Update to add the property you converted to business use.

When asked about prior depreciation, enter the total from the depreciation report(s) from last year (see screenshot below - click to enlarge).

[judithadriscoll]

Thanks for your detailed reply, Patricia.  Unfortunately, when I followed your instructions, I was not asked to enter prior depreciation, even though I did find it in last year's reports.  When selecting a category, the only option I could reasonably select (from a list of descriptions) was "non-residential real-estate."  Could you provide further guidance?

[PatriciaV]

Yes, if you are using this property as a business office, it is "non-residential real estate" (ie: office building). Depreciation is entered on the page "Confirm Your Prior Depreciation." See screenshot in answer above.

[judithadriscoll]

Hi again Patricia, you have been just lovely about responding to my questions.  Thank you.  I'm afraid I have one or two more.  I noticed when I went to the depreciation report, the house was listed twice.  With some checking around, I see that I entered it under the home office section, where I entered many associated expenses, such as utilities and taxes.  It is there that the same depreciation was calculated, but I can't figure out how to change it without deleting the home office and starting over.  All of the input with be gone with that deletion, so I'm wondering if you know of any way to change only the depreciation figure.

[PatriciaV]

If you use the entire building as your office, you would not qualify for the Home Office Deduction. In this case, go back to that section and remove your entries (including the Home Office Asset).
All expenses related to your business building are 100% deductible.

[PatriciaV]

I'm also curious why you found this answer was not helpful.

[judithadriscoll]

I'm so sorry--I hit that button in error, then immediately tried to change it; apparently without success.

[judithadriscoll]

A follow-up question re: entering Depreciation from Prior Years into Schedule C.  As you said, I have regular and AMT depreciation from last year.  Would I add "prior" and "current" from both reports, adding together those four figures for the amount to enter?

[PatriciaV]

No. Enter regular depreciation only (prior + current).

[judithadriscoll]

Got it!  You are awesome, Patricia.