turbotax icon
turbotax icon
turbotax icon
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

ekeleme
New Member

Where do I enter rental property depreciation?

 
Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

4 Replies

Where do I enter rental property depreciation?

You enter the rental property as an Asset to be depreciated in the Rentals and Royalties section of the program.  Specifically on the screen for the Rental Summary click the Start or Update button for Assets/Depreciation.

Carl
Level 15

Where do I enter rental property depreciation?

If you work through the Rental & Royalty Income (SCH E) section of the program the way it is designed and intended to be used, depending on how you acquired the property (purchased outright, or converted from primary residence) the program will take care of this for you automatically.

If it does not (because of your acquisition method) then just work it through the Assets/Depreciation section. Do note that when entering a rental property into the TurboTax program for the first time, perfection is not an option. It's an absolute must. If you do it wrong, then your mistake will exponentially grow larger with each passing year. Then when you catch the error (if the IRS doesn't catch it first) years down the road, the cost of fixing it will be $expensive$. So if you have questions, ask.

Assuming this is your first time dealing with rental property in the TurboTax program, the below guidance is provided for additional clarity.

Rental Property Dates & Numbers That Matter.

Date of Conversion - If this was your primary residence before, then this date is the day AFTER  you moved out.
In Service Date - This is the date a renter "could" have moved in. Usually, this date is the day you put the FOR RENT sign in the front yard.
Number of days Rented - the day count for this starts from the first day a renter "could" have moved in. That should be your "in service" date if you were asked for that. Vacant periods between renters count also PROVIDED you did not live in the house for one single day during said period of vacancy.
Days of Personal Use - This number will be a big fat ZERO. Read the screen. It's asking for the number of days you lived in the property AFTER you converted it to a rental. I seriously doubt (though it is possible) that you lived in the house (or space, if renting a part of your home) as your primary residence or 2nd home, after you converted it to a rental.
Business Use Percentage. 100%. I'll put that in words so there's no doubt I didn't make a typo here. One Hundred Percent. After you converted this property or space to rental use, it was one hundred percent business use. What you used it for prior to the date of conversion doesn't count.

RENTAL POPERTY ASSETS, MAINTENANCE/CLEANING/REPAIRS DEFINED

Property Improvement.

Property improvements are expenses you incur that add value to the property. Expenses for this are entered in the Assets/Depreciation section and depreciated over time. Property improvements can be done at any time after your initial purchase of the property. It does not matter if it was your residence or a rental at the time of the improvement. It still adds value to the property.

To be classified as a property improvement, two criteria must be met:

1) The improvement must become "a material part of" the property. For example, remodeling the bathroom, new cabinets or appliances in the kitchen. New carpet. Replacing that old Central Air unit.

2) The improvement must add "real" value to the property. In other words, when  the property is appraised by a qualified, certified, licensed property appraiser, he will appraise it at a higher value, than he would have without the improvements.

Cleaning & Maintenance

Those expenses incurred to maintain the rental property and it's assets in the useable condition the property and/or asset was designed and intended for. Routine cleaning and maintenance expenses are only deductible if they are incurred while the property is classified as a rental. Cleaning and maintenance expenses incurred in the process of preparing the property for rent are not deductible.

Repair

Those expenses incurred to return the property or it's assets to the same useable condition they were in, prior to the event that caused the property or asset to be unusable. Repair expenses incurred are only deductible if incurred while the property is classified as a rental. Repair costs incurred in the process of preparing the property for rent are not deductible.

Additional clarifications: Painting a room does not qualify as a property improvement. While the paint does become “a material part of” the property, from the perspective of a property appraiser, it doesn’t add “real value” to the property.

However, when you do something like convert the garage into a 3rd bedroom for example, making a  2 bedroom house into a 3 bedroom house adds “real value”. Of course, when you convert the garage to a bedroom, you’re going to paint it. But you will include the cost of painting as a part of the property improvement – not an expense separate from it.

 

Where do I enter rental property depreciation?

I'm having this issue as well. there is no depreciation listed in my final return, nor can I find anywhere I can add it. any guidance?

JamesG1
Employee Tax Expert

Where do I enter rental property depreciation?

In TurboTax Online, report depreciable assets under the rental activity.  TurboTax software will determine the depreciation for each asset.  Follow these steps:

 

  • Down the left side of the screen, click on Federal.
  • Down the left side of the screen, click on Wages & income.
  • Scroll down to Rentals, Royalties, and Farm.  Select Show more.
  • Select Start / Revisit to the right of Rental Properties and Royalties.
  • At the screen Your 2022 rentals and royalties summary, you are able to view any rental or royalty activity that has been created.
  • Click Edit to the right of the rental activity.
  • At the screen Here's rental property info, scroll down to Assets.  Click Edit to the right.
  • At the screen Your Property Assets, click Add an Asset.
  • At the screen Describe This Asset, select the asset option.  Click Continue.
  • At the screen Tell Us a Little More About Your Rental Asset, select a category.  Click Continue.
  • At the screen Tell Us About This Rental Asset, enter the asset information.  Click Continue.
  • At the screen Tell Us More About This Rental Asset, select i purchased this asset.
  • Enter the date that you started using the asset for business.  Click Continue.
  • At the screen Asset Summary, click Show Details to see the depreciation details.

@Adamisconfused 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Use your Intuit Account to sign in to TurboTax.
By selecting Sign in, you agree to our Terms and acknowledge our Privacy Statement.
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies