TurboTax uses a wrong recovery period to calculate my foreign rental property depreciation. How can I make it use 40 years for recovery period?

[AmeliesUncle]

What is the program using?

Is it Residential Rental Property?

Was was it first "placed in service"?

[constantine-vainstein]

Yes, this is a residential property. It is an apartment in a multi-family building. It has been rented out since 07/1/2020, but since I became a U.S. resident only in 2022, in my 2023 and 2022 return, my CPA marked 1/1/2022 both as the day it was obtained and the date it was put in service.

I am not sure I understand your question about the program.

Thank you

[AmeliesUncle · Accepted solution]

I was asking how many years is TurboTax using.

For Residential Rental Property that is outside of the United States, the correct number of years is 30 years because your property was "placed in service" after 2017.  If your prior tax preparer was using 40 years, that is no longer used (the rules changed starting in 2018).  You may need to go to a good tax professional that knows how to correct things by using Form 3115.

[constantine-vainstein]

Thank you. I’ll start with clarifying with my CPA why she used 40 years. 

[constantine-vainstein]

After a review my CPA has admitted a mistake. She is about to correct it retroactively using 3115 and by instructing me to add the difference in the depreciation for the last two years as “Other expenses” to the rental property expenses. Is there a way to add 3115 prepared by my CPA to TurboTax e-filing, or is it better to download the full return from TurboTax, add 3115 from my CPA and file it all together by mail?

[AmeliesUncle]

I don't THINK TurboTax has the ability to include attachments like the 3115 and the supporting attachments for that form.  If that is the case, you'll need to print everything and mail it.

[constantine-vainstein]

Thank you