My rental property does not show depreciation on Schedule E. I thought Turbo tax took care of this for me? How do I amend?

[8522735me]

How do I talk with a real person?

[tagteam · Accepted solution]

Follow the instructions at the link below to amend your 2019 income tax return.

https://ttlc.intuit.com/community/tax-topics/help/how-do-i-amend-a-2019-return-in-turbotax/00/123845...

You can contact Support via the link below.

https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632

In order for TurboTax to calculate depreciation on your rental property (so that the deduction appears on Schedule E), you need to proceed through Rental Properties and Royalties in the program and enter your property in the Assets/Depreciation section.

[AmeliesUncle]

Did you enter any personal-use days?  If so, that is likely that cause (assuming you entered the "asset" for depreciation).  And unless it went back-and-forth between rental and personal use, you should be entering ZERO personal days.

[JBGoode]

I thought I had the same problem, but found the depreciation showed up on Form 4562 instead of Schedule E where I would have expected it.

[AmeliesUncle]

@JBGoode   In most cases it still shows up on Schedule E. 

[Carl]

Depreciation expense/deduction shows up on line 18 of the SCH E. If you have more than one passive activity reported, then the amount of depreciation allowed for each activity will show up in it's respective column on line 18, for that specific passive activity.

If you do not see any depreciation on line 18 for a specific activity, and you know there should be depreciation, there are several reasons for this.

1) The assets of the activity were fully and completely depreciated in the prior tax year. (This is not common)

2) You incorrectly entered an amount of personal use days greater than ZERO, when you "in fact" have no personal use days. (read the note on that screen, then change personal use days to ZERO)

3) You incorrectly entered the same values in the COST box and the COST OF LAND box.

4) You have absolutely no assets what-so-ever listed in the assets/depreciation section of the program (or the depletion section if this is for royalty income.)

[Drew_43]

Carl,

I made the mistake with the personal use days, but I am really confused here.

When I zeroed out personal use days, it now says I will owe $2644 to federal. This may be ok, as I was due for a $7300ish refund. However, it is also showing the full amount of property taxes for the WHOLE year on Schedule E, but I did live in it for five months.

What is this supposed to actually look like? I am so confused.

Thanks,

Drew

[KrisD15]

I do not see any background for your question, only the questions in the thread from other posters.

If you report zero personal use days, the rental is eligible for the property tax expense for the entire year. 

If you used it personally for 5 months, you must enter that so the program allocates 7/12 the tax as a rental expense. 

The post earlier is saying that if there is no depreciation showing, you may have entered the wrong number of personal days. 

@Drew_43 

[Drew_43]

Sorry, allow me to provide proper context. The depreciation on my Schedule E does show 0 for the following property, but not on Form 4562.

I own a property that I moved into July 2022. On May 31, 2023, I moved out of the property. It was vacant for several months and finally was leased to a tenant for residential purposes on October 27, 2023.

The property tax for the year is about $10,834.81, and the mortgage interest is $27,545.29.

I had noted 151 personal use days on my Schedule E. My understanding is that this would be incorrect, as I did not use the property for personal use when I began renting it. Rather, I LIVED in it as my primary residence for 151 days before vacating and eventually leasing. According to the TurboTax instructions, this should make my personal use days 0 for the purposes of Line 2, Schedule E.

Because the portion of the taxes and interest for the time I lived there would equal $4514.50 and $11,477.20, respectively, do I need to modify my Schedule A to reflect these numbers? At the moment, my Schedule A lists $19,711 for Line 5b, State and local real estate taxes, and $50,109 for Line 8a, Home mortgage interest (I have no points involved). These numbers do NOT look right!! I think there is some double dipping happening that I did not intend. I remembered electing to use the tax court method when I first added the property, so I think I am somehow itemizing the full year's worth plus 10/12 months, roughly.

Please help!

@KrisD15 

[MarilynG1]

Yes, delete your Mortgage Interest and Property Tax amounts from Schedule A.

Enter the entire amount of each in the Rental Expenses section.

TurboTax will calculate the Rental Portion and move the balance to Schedule A.

There's not much difference in using the Tax Court Method or IRS Method, but go ahead and uncheck the box.  Since you're either renting the property, or living in it (but not both at the same time), it doesn't affect you. 

Here's more info on Rental Property Expenses. 

@Drew_43 

[Drew_43]

Thank you SO SO much @MarilynG1!

Ok, so I delete the 1098 info in my deductions and credit section (I'm not using the forms-based edition).

I then verify that I converted the property from personal use to rental, and that it is my first year renting the property, since I bought it in 2022 and didn't rent it at all that year.

Since the lease began October 27, 2023 and extended through December 31, 2023, the rental use days would be '66.' Because I did not have any personal use days once I began renting it, even though I converted it from my primary residence, my personal use days would be '0.' Because of this, there is no option to elect tax court or IRS method. This should remove the check mark on the actual form itself.

Because I enter this information as such, my Schedule A should be populated with the ratio reflecting the part of the year that the home was NOT used for rental purposes, or roughly 10/12 of those full amounts I originally listed above (~ 10,800 and 27,000).

Thanks again!