According to IRS Pub 946 Depreciation of Property, solar panels are depreciated over five years. using the double-declining balance method.
In TurboTax, you can choose "Computer, Video, Photo, etc." as the type of asset so you report a 5-year class life.
You can also enter this manually as an "other asset type":
- Because solar installations are not common, you may need to enter this as "Intangibles, Other property" for the asset category and "other asset type."
- Enter your original purchase price for cost and the date it was placed in service.
- Show that you purchased this asset and enter the percentage of business use.
- Enter the date the property was first used as a rental.
- Choose 5.0 year asset class life, half-year convention, and with 200% declining balance depreciation method.
- It is not "listed property."
- Enter the amount of Section 179 deduction, if you claimed that in the first year.
- Enter the amount of depreciation you claimed last year, if any, including special depreciation.
- If necessary, click the "show details" box so you can confirm your entries are what you expect.
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