Smart Check stuck on prior depreciation value for fully depreciated appliances in rental property that's been sold

[23bambam23]

Hello,

Smart Check flagged the value I input for fully depreciated appliances that are an asset for a rental house I sold in 2021.  I obtained this value from the prior depreciation value of the appliances in 2020 and it’s equal to the original cost of the appliances and also the prior depreciation value listed on the 2020 AMT Depreciation Report.  The error message says the AMT prior depreciation is too large and that the depreciation cannot exceed the business basis.  Any idea how to work around this flag?  Thanks.

[KrisD15]

On the screen where you enter the prior depreciation, there are two input areas, one for regular depreciation and one for AMT depreciation. 

Please be sure that you did not enter the full depreciation in both boxes or it will double the amount.  

[23bambam23]

Thanks Kris, but there is no place to enter AMT depreciation on the Review Information screen.  The only fields to enter are:

Description

Date

Asset Type

Cost

Business %

Prior deprec.

Special Depreciation Allowance

I forwarded through the rest of the interview for this asset and did not see any place to input AMT depreciation.  Any other thoughts?

[KrisD15]

Did you enter prior depreciation AND Special Depreciation Allowance,

such as Bonus depreciation and/or  Section 179?

I suggest you go to Step-by-Step if using Desktop

Select Rental Properties 

Yes to review

Get to the Summary screen and Edit the rental 

Scroll down to Sale of Property/ Depreciation 

Yes to summary

Select Edit for the item

Go through the interview 

Make sure the depreciation, Bonus depreciation and Section 179 is not more than the cost 

[23bambam23]

Thanks for the response.  Yes, I did have a Special Depreciation Depreciation allowance for the appliances.  Should I subtract that amount from the Depreciation in the interview?

[PatriciaV]

How you adjust the total depreciation is not as important as keeping the total under the basis. In other words, you cannot depreciate more than the original cost of the property/asset.