TurboTax has incorrect depreciation life for rental house assets after 2019. Should I manually override?

[emmel650]

I just noticed that between 2019 and 2020 tax years, TurboTax changed the depreciation life for a new roof  that had been on the depreciation schedule for my rental house since 2015.  In 2019, the asset was shown with a life of 27.5 years and SL/MM depreciation method as I expected, same as the main rental house.  But in 2020, TurboTax changed the life to 39 years for some unknown reason, and for 2021, it is also shown as 39 years.  In 2020 I also installed a new central AC system, and that is also showing with a life of 39 years instead of 27.5 years.  Can I fix this using the step-by-step interview, or do I need to override in forms?  Do I need to file an amended return for 2020 if I make the change in 2021?  Will TurboTax calculate the correct prior depreciation or do I need to do some override for that also?

[emmel650]

Upon further investigation, it seems TurboTax has Type of Asset set to be "J6 - Roofs/HVAC/Fire/Alarm/Security" instead of "I - Residential Real Estate", but I think the latter is the correct category.  The interview questions are not clear on when to choose one vs. the other for roofs and HVAC.  Maybe that's how the 39 years got into the tax return.  If I change it to Residential Real Estate for 2021, will TurboTax recalculate the prior depreciation as if it had been taken in 2020?

[ColeenD3]

You will have to amend your 2020 return to include the correct useful life for the RRE 27.5 year asset.

[Critter-3]

Type of Asset set to be "J6 - Roofs/HVAC/Fire/Alarm/Security"

Sounds like you accidentally choose the non residential path and ended up in the commercial property section where there is a J6 category.  Amending the 2020 return will be required.

[Carl]

But in 2020, TurboTax changed the life to 39 years for some unknown reason, and for 2021, it is also shown as 39 years. In 2020 I also installed a new central AC system, and that is also showing with a life of 39 years instead of 27.5 years.

I just did some testing. Most likely, you choose non-residential rental property, which would be depreciated over 39 years. You should have chosen residential rental property. If this is your case, you'll need to amend the 2020 tax return. Keep in mind that after amending, you'll need to restart your 2021 return from scratch in order to import the corrected amounts for prior years depreciation, as well as PAL carry overs if you have any.