There has not been any reporting of depreciation calculation errors this year.
I cannot see your return to see where the depreciation is calculated. Without knowing the type of asset, cost, date acquired, and depreciation calculated I am unable to adequately answer your question.
Why, specifically and explicitly do you believe the program is wrong? Rental asset? Business asset? Farm Asset?
Some other type of income producing asset?
i am a farmer. I am trying to depreciate the painting of my barns. Program keeps coming up with zero.
Normally, painting is considered a repair and maintenance item, so you could probably deduct it as an expense.
If you decide to depreciate it, however, what type of property are you selecting for it?
I am trying to depreciate the painting of my barns.
The cost of painting a structure is not depreciated. It's a flat out expense.
In order to qualify as a property improvement asset that is capitalized and depreciated, two criteria must be met.
- The improvement must become "a material part of" the structure.
- The improvement must add "real value" to the structure. In other words, when appraised by a certified, qualified, licensed property appraiser they will appraise it at a higher value than they would have without the improvment. Painting alone does not add value to the property. Theres no guarantee a buyer will pay more just because it was painted. In fact, they may not even like the color.
However, when you do a "real" property improvement (such as replacing the siding) you will of course paint it after you replace that siding. But the cost of painting is included in the total of the property improvement cost. It is not separated out from it. Doesn't matter if you only replaced siding on one side and painted the entire structure to make everything match. That cost of painting is "still" a part of the property improvement.
I am having the same issue. I purchased a new vehicle (financed). Turbo Tax says it "we will cover depreciation and other... later" but it never does.
Any help will be appreciated.
Probably not ready yet. There will be many program updates to come. Be patient. The IRS isn't taking returns until Jan 27, 2021 or later.
Same problem - not doing the depreciation nor the sale of a rental unit
Please see the attached help for steps on how to correct this issue.
They just left mine off entirely. I expected auto fill as I have been getting that for 10 years. I didn't receive a prompt to do it myself. It was only when I printed that I found out what happened. Unfortunately I had efiled 5 minutes prior to the discovery of the errors. Now they won't help me. They have cost me 5 grand. I spent a long time on the phone only to be told they had no answer
For me, it was my 3 rental houses that I have owned for 10 years. It has auto-filled the depreciation every year until now. There was no notice of a change. The folks at TT haven't a clue and can't help me.
You can amend and include the depreciation. Go to the asset section of each house and enter the information. To amend 2020 follow these steps.
First, make sure you really need to amend and that your 2020 return was accepted in TurboTax Online or paper-filed through the mail. You can't amend a return that hasn't been filed yet.
When you're ready to amend, find your situation below and follow the instructions.
@Ocean Shores Did you Transfer from 2019? Did other things transfer over? Are you using the Desktop program or the Online version? You may have transferred from the wrong account or wrong 2019 file. Or maybe in 2019 you marked the assets as sold or final? Are you filing them on Schedule E for Rentals or Schedule C as Business?
I acquired an asset on 10/12/2021 and it is 100% business, the program calculates depreciation as if it is only 25% business. When I change the date to 1/1/2021 I get the proper calculation. Seems like I have to put in an incorrect date to get the proper calculation.
Just my experience.
@shealeenp wrote:
I acquired an asset on 10/12/2021 and it is 100% business, the program calculates depreciation as if it is only 25% business. When I change the date to 1/1/2021 I get the proper calculation. Seems like I have to put in an incorrect date to get the proper calculation.
Just my experience.
You do not receive a full year depreciation for an asset placed in service in the 4th quarter of the year. You only receive about 25% of the full year deprecation. For next year you would receive the full year of depreciation if the asset is in service for the full year.
I've been a loyal Turbo Tax customer for more than 15 years. How I regret that and wish I'd hired a professional years ago!!!!!
I had a rental property for 14 years that I sold in 2022. For years I was "under water" after the 2008 market crash but fortunately, I was able to sell the rental in 2022 for a good amount above the purchase price. Shame on me for not understanding the concept of depreciation. I'm now facing a large capital gain that could've been reduced had Turbo Tax (Premier) coached me through the depreciation calculation all these years. The only reason I hired an accountant for this year is in addition to selling the rental, I inherited some money and my husband received stock options. My accountant used to work for Turbo Tax and said errors in the software are almost always in favor of the IRS. That's why the IRS recommends Turbo Tax (unreal!).
If you have even one rental property, DO NOT USE TURBO TAX!!! What's happened to me and so many others is absolutely criminal!!!!!!!!!!!
Depreciation on rental property is always figured on the lower amount, what you purchased the property for (your basis) or the value when the property is put into service.
You enter that into the TurboTax program when you list the rental.
Depreciation is taken year after year, there is nothing that you can do to change that.
The Depreciation recapture is reported as Ordinary Income (not capital gain)
The profit you realized (the amount you sold it for which is over what you paid for it) is Capital gains.
Have to agree. So does the accountant I saw this week. In the process of getting it straightened out. Thanks.
Unfortunately it didn't do it right to start with so I am now n the process of having an accountant straighten it out.
I am having the same problem with my rental property. The basis for the property is 205,000. This building cost only. The property was put in service 4/20/1999. Last year the property depreciation was $7,454 from my CPA's depreciation schedule. When I enter the depreciation figure for prior years in turbo tax, I get 27,225.00. What am I doing wrong? The property is a short term seasonal rental. Thanks for reading this problem.
Do you use the property for personal purposes also? If so, make sure you entered the number of days the property was rented in 2022, and number of days of personal use.
When you set up the rental property asset, and indicate that you first started renting in 1999, TurboTax calculates the 2022 depreciation amount for you. You don't need to enter a Prior Depreciation amount, TurboTax calculates that for you.
Depending on the % of Business Use, continue and you will see the 2022 depreciation number. If you never used the property for personal purposes, the yearly depreciation would be calculated based on Cost Basis. In the first screenshot, I indicated no personal use and 150 days rented.
In the second screenshot, I indicated 150 days rented and 14 days of personal use.
Check your entries in the Property Profile and Asset Entry areas.
Thank You for running the numbers for me. I am still confused.
The figures h from Turbo Tax are incorrect from my point of view. As I understand the depreciation at the end of the 27.5 years the value should be zero. Therefore if I multiply the estimated expense for the 100% business use, it should equal the cost basis figure of $205,000 right? Taking the 10,471.00 figure times 27.5 equals $261,775.00 or 56,775 over the cost basis of $205,000. Using the same logic with my figures for past filings, done by my CPA the figure is short by approximately one percent. Per the IRS the allowed annual percentage rate for SL MM is 3.636%?
To sum it all the figure I am getting on Turbo Tax is approximately 3.5 times larger than previous years numbers and I can not figure out what I am doing wrong. I am using the 100% business use.
Thanks
carzysailor
The place in service date also makes a difference in the depreciation expense. Residential real estate is depreciated over a 27.5 year life on a straight-line basis and used a mid-month conversion (this means that for the month placed in service, no matter what day during the month, you will only get a half of month's worth of depreciation for this first month).
Please make sure the Accumulated Depreciation from the prior depreciation report is entered correctly. Not all software shows the ending accumulated depreciation. Some software will show the prior year's ending and you would need to add 2021 depreciation expense in order to compute the correct 2021 accumulated depreciation amount.
Please also review the IRS Publication below: