Special Depreciation Allowance

[rachelmeredithwarren]

On a rental property, I took 2024 Special Depreciation Allowance of 60% for an improvement.

In 2025, I would like to start taking the remaining 40%.

The interview is generating $0 for 2025.

Is there a way for me to edit Form 4562 directly? Or modify my interview responses to generate the correct 2025 depreciation.

[AmyC]

The most important thing to know is that the 60% Special Depreciation Allowance is a one-time deduction taken in the first year the property is placed in service.

When you take that 60% allowance:

• You deduct 60% of the cost immediately in 2024.
• The remaining 40% (the "adjusted basis") must be depreciated over the useful life of the asset (usually 5, 7, or 15 years for rental improvements).
• You cannot take that remaining 40% all at once in 2025.

Since your software is generating $0: (I have underlined my two biggest suspects but check all)

1. edit the asset
2. verify cost basis, recovery period, prior depreciation are all correct
3. depreciation method to be used on the remaining 40% must be marked

Once all of those fields are correct, the program will know it needs to calculate this year's depreciation on that 40%.

[rachelmeredithwarren]

Thank you so much for your response. I am definitely depreciating the remaining 40% over the useful life (not as a lump sum in 2025). It is helpful to confirm that this is the correct approach. 

I tried the steps you suggested and, alas, no luck. When I answer "yes" to taking 2024 special depreciation allowance for 60% of the cost, online TT continues to zero out the depreciation for 2025. When I say no, it overstates the depreciation. I'm going to keep experimenting. 

[AmeliesUncle]

Did the business percentage drop in 2025?

You said an "improvement", so this is not a vehicle, right?

[go314nathan]

was this issue resolved? I am having the same problem. 

[PatriciaV]

This is a known issue in TurboTax and the latest estimate for the update to be released is April 19, 2026, which is after the filing deadline.

You have to options:

1. Request an extension of time to file, pay the taxes you think you owe now, and file after the update has been released. See: How do I file an IRS extension (Form 4868)?
2. File now, pay the taxes you think you owe, and amend after the update is released. See: How do I amend my federal tax return?

@go314nathan