Unless it is the first year an asset is placed in service, you don't always get Form 4562.
Who Must File
Complete and file Form 4562 if you are claiming any of the following.
Depreciation for property placed in service during the 2020 tax year.
A section 179 expense deduction (which may include a carryover from a previous year).
Depreciation on any vehicle or other listed property (regardless of when it was placed in service).
A deduction for any vehicle reported on a form other than Schedule C (Form 1040), Profit or Loss From Business.
Any depreciation on a corporate income tax return (other than Form 1120-S).
Amortization of costs that begins during the 2020 tax year.
Depreciation of what? A SCH C business asset? SCH E Rental property? SCH F farm assets?
The 4562 forms are generated every year that you have depreciation on an asset of any type. However, it's only included in your filing if:
1) It's the first year you are depreciating assets.
2) You add/remove/sell/dispose of an asset, or anything else changes that would affect the depreciation of that asset.
So if one of the above doesn't apply to you, if you elect to "save everything" as a PDF, you'll be able to access and see the 4562 in the saved PDF file.
So, are you saying I can only depreciate (4562) my rental property the first year it's put in use? That's how I read your answer.
@momof2labs wrote:So, are you saying I can only depreciate (4562) my rental property the first year it's put in use? That's how I read your answer.
The FORM is only filed the first year when an asset is "placed in service". For all other years, you continue depreciation, but Form 4562 is not filed with the IRS.
In the first year of having a rental property, there are three forms clearly labeled "form 4562" in the tax return. The first one prints in portrait format and is filed with the actual tax return in that first year *only*.
The other two form 4562's print in landscape format. One is titled "Depreciation and Amortization Report" and the other is "Alternative Minimum Tax Depreciation Report".
After that first year, if there is no change to the list of assets on the landscape 4562's, then that specific form is not filed with your tax return. The depreciation taken on the property will be shown on line 18 of the SCH E form every single year the property and/or it's assets are "in service" as a rental asset.
If there is "ANY" change to 'ANY" asset then the portrait 4562 will be generated and filed with the return.
The two landscape 4562's will be in your tax return *every* *year*, no matter what. Those two landscape form 4562's are for your records and are used to keep track of the depreciation history.
I have received a form 4562 every year since the property was first rented out (2006) until 2020 when I am going back through the return pdf and don't see it. I don't see any option to save all or print worksheet, and Schedule E does not have any depreciation entered on line 18 (first time not included since 2006).
Nothing changed in 2020, the property continued to be rented. This is confusing, as in 2021 the property has been sold and I am trying to get paperwork together for the 2021 return which will need to include the sale.
Thanks
Did you start your tax return in January? If so, the program had an error that did not carry over your depreciation.
did you have asset additions in 2020? the IRS does not require and Turbotax does not do a 4562 if this is the case. but there should be a depreciation report.
however, if any of the following situations occurred there should have been the form.
• A section 179 expense deduction (which may include a carryover from a previous year).
• Depreciation on any vehicle or other listed property (regardless of when it was placed in service).
• A deduction for any vehicle reported on a form other than Schedule C
Your total depreciation for 2020 for all assets is on line 18 of the SCH E.
With TurboTax, there can be up to three IRS Form 4562's for each rental property. One of them prints in portrait format and is generated only if there is a change in assets in the tax year. For example, adding an asset, selling an asset, removing an asset from the business for personal use, etc.
The other two 4562's print in landscape format. One is titled Depreciation and Amortization Report and this will show you a (somewhat) detailed breakdown of each asset for that specific rental property. The other is titled Alternative Minimum Tax Depreciation Report and shows the same detail. Neither of these two landscape reports gets filed with your tax return. They're provided by the program for informational and tracking purposes only.
Thanks! I started my return in January’21. Information was carried over from previous TurboTax return, but didn’t submit until nearer the deadline.
The return was processed with no alerts or rejections.
So just to confirm my understanding, I need to submit an amended return so that depreciation is included in Schedule E? Thanks again.
@chriskitchin wrote:
So just to confirm my understanding, I need to submit an amended return so that depreciation is included in Schedule E?
Yes, If, for whatever reason, your depreciation deduction was not included on Schedule E, you should file an amended return.
God bless all of you for answering questions! It really helps us newbies!
@iamartin wrote:
Just wanted to thank you for saying 4562 is for informational and tracking purposes only.
Just for the record, Form 4562, itself, is not informational, but is required to be filed under certain circumstances.
What is informational are the two depreciation and amortization reports that TurboTax generates. Unfortunately, the reports have "Form 4562" printed on them which has created some confusion.
Has TurboTax updated the depreciation worksheet for rental property. When I try to enter expenses and new depreciation items I get a message that the IRS has not yet updated the worksheet and TurboTax will update when received. My software has been downloading updates but this update has not occurred. What is the fix?
If you are using the TurboTax CD/Download software then you may want to try manually updating your software. The below TurboTax help article will assist with this.
Manually Update TurboTax for Windows Software (Basic, Deluxe, Premier, Home & Business)
If you continue to have issues please reach out to a TurboTax representative for assistance.
What is the TurboTax phone number?
MichelleO, Thank you for your reply however, I have tried to manually update and I am still getting the message that the IRS has not finalized the tables/form yet. I then did call TurboTax and the representative told me to wait as TurboTax has not been able to update the depreciation and amortization forms/table for rental properties (schedule E). I am surprised by this given it is now approaching March 1st.
If this is incorrect please let me know what I can do, given the date. I was hoping to finish my taxes by now .
@Pauldina wrote:
MichelleO, Thank you for your reply however, I have tried to manually update and I am still getting the message that the IRS has not finalized the tables/form yet. I then did call TurboTax and the representative told me to wait as TurboTax has not been able to update the depreciation and amortization forms/table for rental properties (schedule E). I am surprised by this given it is now approaching March 1st.
If this is incorrect please let me know what I can do, given the date. I was hoping to finish my taxes by now .
I am using the 2021 TurboTax Premier desktop CD/Download edition for Windows and have both a Form 4562 and the Depreciation and Amortization Report available in Forms mode.
Exactly what type of problem are you having with the rental property section of the program?
Not the OP, but will chime in with a similar complaint and some details hoping to illustrate what sounds like the same problem. In my case, foreign property (so 40 yr, SL, MM) with a prior interruption in depreciation requiring me to change checkbox on the depreciation asset worksheet line 43, forcing TT to use tables rather than calculation so that I can enter my own prior depreciation. This has worked successfully for maybe 10 years, setting and prior value is imported forward every year. This year it will not calculate depreciation, instead gives me what I think is the same message as OP gets-- IRS forms not ready (which is very not true!).
If I delete the property and reenter without that worksheet line 43 changed, using standard formula rather than forcing depreciation table, it proceeds (with incorrect depreciation, of course). Checking that line 43 box then causes the result to disappear and be replaced by the OP's message. I believe that *unchecking* the box does NOT then make it work again, but not absolutely certain of that.
Edit to note: downloaded deluxe version. And the superpatch in manual update link above didn't fix it.
I presume you are aware that the ADS recovery period changed for the 2018 tax year.
Could that be causing the issue?
Only changed for property placed in service in 2018 and after, I do believe.
@Carl wrote:
Only changed for property placed in service in 2018 and after, I do believe.
Except @gd28 wrote that there was a "prior interruption in depreciation". If the asset had been placed into service prior to 2018, taken out of service, and then placed back into service thereafter, that might be problematic.
If the asset had been placed into service prior to 2018, taken out of service, and then placed back into service thereafter, that might be problematic.
I don't think so. But it does require some manual math outside of the program. The cost basis would have to be adjusted by subtracting the prior depreciation taken, and the new basis entered in the COST box. The land value would remain unchanged. Then the program will figure on the 30 year schedule with the new structure value, starting all over from year 1.
It can be a pain, because it's up to you to remember the prior depreciation taken before converting back to rental, since that has to be included in recapture when sold. If you sell years down the road and forget about that prior depreciation, then it's included in the capital gain and taxed at the capital gain tax rate.
If the capital gain is excluded under the "2 of 5" rule, then you're not paying any tax on it, and the IRS would have an issue with that if/when they caught it.
@Carl wrote:I don't think so. But it does require some manual math outside of the program.
It would be problematic if the user were trying to continue with the 40-year recovery period.
Regardless, there have been issues relating to foreign rental property and Form 1116 so that might be the issue.