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turbotax not taking into account date in service for reporting depreciation

Hi,

I was checking my 2022 return filed through turbo-tax, and although I had put my rental information which was placed in service in Aug 2022, turbotax did not report the depreciation for that year.

 

1) Can I now amend it online given its 2024?

2) When I try to amend it online, turbotax reports whole year depreciation, although I bought this property in Aug and started renting it from Aug. Do I need to manually report the prorated depreciation?

3) When I file the amended return, will Turbotax automatically carry over the loss to 2023 report and I can then amend that return as well? Do I need to also file form 3115?

 

Thank you

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3 Replies
Carl
Level 15

turbotax not taking into account date in service for reporting depreciation

1) Can I now amend it online given its 2024?

If you have not yet filed your 2023 tax return, you can just amend. Otherwise, you'll need to file form 3115. I would suggest you do the 3115 with your 2024 tax return.

2) When I try to amend it online, turbotax reports whole year depreciation, although I bought this property in Aug and started renting it from Aug. Do I need to manually report the prorated depreciation?

I see this situation quite often, because of incomplete guidance in the program resulting in incorrect selections by the user.  You should select that you rented the property "the whole year". The program will still figure depreciation based on the in service date. If asked, you'll show days rented as the number of days from the in service date to the end of the year, and personal use days as ZERO.

3) When I file the amended return, will Turbotax automatically carry over the loss to 2023 report and I can then amend that return as well? Do I need to also file form 3115?

Yes, ***PROVIDED*** you have not started your 2023 return yet. You can only import from the prior year tax return at the very beginning of the tax return you are working on. Even then, check and make absolutely certain that you import from the *AMENDED* return, and not from the original return.
With the online version, save a PDF and the .tax2022 file of the 2022 return to your computer ***BEFORE*** you start the amending process. That originally filed return "WILL" be replaced by the amended return, and if you don't have a copy of the original .tax2022 file, there is no possible way to go back if you need to.

turbotax not taking into account date in service for reporting depreciation

#3   If you already filed 2023 it wont automatically update.  You would need to amend 2023 and manually make any changes.   You have to start amending with the original return as filed.   

turbotax not taking into account date in service for reporting depreciation


@sonalisapal wrote:

Do I need to also file form 3115?


Yes, but only if both your 2022 and 2023 returns have been filed using an impermissible method of accounting (e.g., without any depreciation deduction taken for both years).

 

See Publication 946 (2023), How To Depreciate Property | Internal Revenue Service (irs.gov)

 

Adoption of accounting method defined.

Generally, you adopt a method of accounting for depreciation by using a permissible method of determining depreciation when you file your first tax return, or by using the same impermissible method of determining depreciation in two or more consecutively filed tax returns.

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