Rental depreciation calculation

[garyl888]

A CPA helped me with my taxes since 2020, but I decided to try it on my own using TurboTax for 2025.   He was able to calculate a yearly depreciation expense ($12976) to be used every year in my tax returns.  It was calculated using cost ($356,829) divided by 27.5 years.  Adding this depreciation results in a negative income in my rental income.   He used the negative income to reduce my overall income.

When I tried using TurboTax, I couldn't get his calculation of $12976 even if I'm entering the same data The depreciation shows higher, $15,000+.  Also, my net income for the rental shows 0 instead of a negative amount.  So I couldn't reduce my overall income.

Any ideas?

[DavidD66]

It's hard to say why you're getting different results with such limited information.  Do you know if you both added a separate asset for the land, that is not depreciated? 

Do you have your depreciation reports for the rental property.  If not, I suggest you get them from the CPA that helped you previously.  Take the information in the depreciation report and use it to adjust your rental property's Asset Worksheet in Forms mode.  If you enter the same cost basis, same date placed in service, and same accumulated depreciation in your Asset Worksheet that is on the Depreciation report then you should have the same depreciation expense.  

As for not being able to take the loss, is your AGI above $100,000.  Taxpayers can deduct up to $25,000 in rental losses against ordinary income if their Modified Adjusted Gross Income (MAGI) is $100,000 or less, with the deduction phasing out entirely by $150,000.  For more information see the following TurboTax article: Rental Real Estate and Taxes

[garyl888]

Thank you for your response!  I'll need to look up my old tax returns for the depreciation spreadsheets.  Another question I have is I rented out my apartment for only 1 month in 2025.  How do I prorate the depreciation expense to be only for 1 month?  I see TurboTax calculated for the entire year.  Regardless if it's 1 month or 12 months, my net income would still be 0 I believe.   Just wanted to make sure I'm not overstating my depreciation amount.

[AmeliesUncle]

If you leave the "prior depreciation" as BLANK, does it give the correct amount?

Are you saying it was rented for a few years and one month at the start of 2025, then the rest of 2025 and the beginning of 2026 as been 100% personal use?  If so, when it asks for the number of rental days and personal days, enter ZERO personal days.  But you will also need to manually prorate annual expenses, such as real estate tax and insurance.