Incorrect depreciation schedule selected last year. Can I fix it this year?

[lck_rules]

In 2021, I replaced a wall in the my rental unit (tore it down and rebuilt it because of termite damage). I incorrectly depreciated it like an appliance (instead of Residential Real Estate).

Should I update the asset in my TurboTax this year? Are there any concerns about doing this?

[maglib]

@lck_rules   the honest answer is you should amend the prior year tax return and fix it...

The truth though is the chances of this being seen is deminimis.  You can just update the depreciation method and fix it manually in TT by putting in the correct information and make sure you adjust prior years taken.  

In the asset entry section:

• In order to enter the asset exactly as it has been reported in the past, choose the last option on the list, Intangibles, Other Property, then click Continue.
• On the next page titled, Tell Us a Little More, select Other asset type, then click Continue.
• Enter the detailed information about the asset:  description, cost, date purchased or acquired.  Click Continue.
• Continue with additional details on the next screen, then click Continue.
• Select the appropriate Asset Class, then click Continue.
• Choose the MACRS Convention, then click Continue.
• Select the Depreciation Method, then click Continue.
• Answer the question regarding Listed Property, then click Continue.  There may be some additional background questions as well, keep going.
• You will eventually come to a screen to confirm the Prior Depreciation, enter the data and click Continue.
• Finally, you will see an Asset Summary screen with the current year depreciation amount listed.  There is also a check-box here to Show Details.  This will open a full description for the asset so you can verify that it matches the previously reported information.  If it does not, you can choose to go Back and re-enter the data that needs to be changed. 

[Mike9241]

if the cost was under $2500 it would qualify as "de minimis" and could be expensed.

[maglib]

@Mike9241  it was a expense from last year.  Also there are many people who are high income that special depreciation is not something you want as you can't use losses...  I slow my depreciation down in fact.

[lck_rules]

Thanks for the detailed response!

>In order to enter the asset exactly as it has been reported in the past, choose

>the last option on the list, Intangibles, Other Property, then click Continue.

The asset currently exists with the incorrect depreciation schedule. Is the idea to create a new one, and delete the old one?

>You will eventually come to a screen to confirm the Prior Depreciation, enter the data and click Continue.

What are your thoughts on what I should enter here?

How would this be impacted if I later amend my prior year taxes?

[ThomasM125]

You need to change the asset category and enter the correct prior year depreciation. That will result in the correct depreciation being reported going forward. Amending your prior year return will not affect your current year return or those going forward. The prior year depreciation you enter when you make your adjustment should be the depreciation that should have been taken in the prior years.