Possible to change MACRS convention from 27.5 to 5 year HY convention?

[armstrongbrown-alicen]

for Depreciation on form 4562, my accountant last year has my rental listed as 5 yr property, HY convention, 200DB method, but turbotax won't let me modify this years MACRS convention for the same property. I tried starting asset details from beginning, but no way to modify the depreciation method that I can see. 

[JamesG1]

I presume that you did not use a TurboTax product for your 2023 income tax return but you are using TurboTax for 2024.

If this is correct, you want to review how the assets were entered into the rental activity on Schedule E Supplemental Income and Loss.

In TurboTax Premium Online, how the asset is identified at the screen Describe This Asset and the screen Tell Us a Little More About Your Rental Asset likely determined whether the asset was reported as 27.5 year or 5 year.

Since you entered the asset in the current year's income tax return, you are able to go back and review the original entries.  You should be able to mirror the selection that your accountant made in 2023.

[armstrongbrown-alicen]

I have tried several times to find where I can change how the asset is entered in terms of the method, convention, number of years. I don't see in any place that Turbotax gives me a choice. Can you be more specific? I tried editing the details of the current asset, I tried creating a new asset to see if there was an option to specify these details. didn't see it.

[KrisD15]

You have the option of choosing that depreciation method for the asset.

When you enter the assets, select 

"Other asset type" on the "Tell Us a Little More" screen

Enter the information needed on the "Tell Us About This Asset / Large Purchase" screen

Enter the information needed on the "Tell Us More About This Asset / Large Purchase" screen

Select "5 year" asset class

Select "I used the half-year convention"

Select "200% Declining Balance" for Depreciation Method

[armstrongbrown-alicen]

Thanks, that did the trick. No way I could have figured that out using existing turbotax instructions.

[AmeliesUncle]

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@armstrongbrown-alicen wrote:

for Depreciation on form 4562, my accountant last year has my rental listed as 5 yr property, 

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Is this for the rental of the actual real estate/building?  If so, 5 years is wrong and you should NOT keep using that.

Is this Residential Rental Property?  Was 2023 the first year it was "placed in service"?

[armstrongbrown-alicen]

Yes, it's a stand-alone cottage on my property. I don't know why the accountant set it up this way. In 2022 it was listed as a 27.5 year recovery, and on 2023 return it changed to the 5-year, but above, Section A on line 17, for "MACRS deductions for assets placed in service in tax years beginning before 2023" it has a sum there, then below it has the info for the 5 year property.  Not sure how to go forward now with the depreciation....

[AnnetteB6]

Try to find a Depreciation Report or something similar that was included with your 2023 tax return.  Since there is an amount being reported on line 17 of your depreciation Form 4562, that probably represents the cottage itself since it was placed in service in 2022.

Then, an amount reported on line 19b would represent a new 5-year asset being placed in service during 2023.  Do you recall adding a new appliance or piece of furniture in 2023 that would be depreciated?  Line 19c would represent the cost of the item placed in service.  The amount may jog your memory.

@armstrongbrown-alicen 

[AmeliesUncle]

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@armstrongbrown-alicen wrote:

but above, Section A on line 17 ... then below it has the info for the 5 year property.  

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[EDIT:  Oops, I didn't see Annette's comment before mine, so this is mostly duplicating what she already said.]

Are you referring to line 19b of Form 4562?  If so, that should be listing a NEW item that started depreciating in 2023 (for example, appliances, carpet, etc.). 

Most assets that were placed in service before 2023 do not show up on line 19.  That amount shows up on line 17, which is likely reflecting the depreciation using the correct 27.5 years.