Yes, you enter this as an asset to be depreciated. Assuming you are working in the rental property section of your return, go to the asset/depreciation section of your rental summary to enter the information on your water heater.
If you had your old water heater listed as a depreciable asset, you will need to take this out of service. If you didn't report it separately, then disregard. Also indicate this is Rental Real Estate Property when it asks for a description of the asset and then in the next screen that follows, indicate this is an appliance.,
If you need to take the old water heater out of service, do so in the following manner.
- Locate the old water heater in the assets/depreciation section of your return
- Select the Water Heater Asset Once you've found the water heater in your asset list, click on it to edit the asset.
- Change the Status to "Disposed":
- TurboTax will ask if you want to adjust or dispose of the asset. You’ll need to indicate that the water heater is no longer in service.
- Select "Disposed of this asset" (or similar wording, depending on your TurboTax version).Enter the date the water heater was removed from service. This is typically the date it was replaced or no longer used for rental purposes.
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