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why on a foreign property rented since 2012 turbotax forces the depreciation period to be 27.5y instead of the correct 40 years? how can i correct this?

 
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6 Replies
pk
Level 15
Level 15

why on a foreign property rented since 2012 turbotax forces the depreciation period to be 27.5y instead of the correct 40 years? how can i correct this?

@RbrtLoi , assuming that this is your first year using TurboTax, try using ADS instead of GDS/MACRS ---- see >>>Publication 527 (2025), Residential Rental Property | Internal Revenue Service.

If on the other hand, if all you are doing is continuing with TurboTax files from 2012 onwards, then I don't understand why the issue  i.e.  foreign residential property life has changed..... I must be missing something here .

why on a foreign property rented since 2012 turbotax forces the depreciation period to be 27.5y instead of the correct 40 years? how can i correct this?

From 2012 through 2024, my tax returns were prepared by a tax professional who consistently and correctly applied a 40-year depreciation period in my federal filings. This year, I am preparing my return using TurboTax and encountered an issue where the software automatically assigns a 27.5-year depreciation period and does not allow me to modify it. The 27.5-year period applies only to U.S. residential rental properties and is not appropriate in my case.

why on a foreign property rented since 2012 turbotax forces the depreciation period to be 27.5y instead of the correct 40 years? how can i correct this?

Go back through the rental section - BOTH the introductory part (where you enter the rental address, etc.) AND the Asset/Depreciation sections.  Look for the pages that have a check-box that ask if it is in a foreign country.

why on a foreign property rented since 2012 turbotax forces the depreciation period to be 27.5y instead of the correct 40 years? how can i correct this?

I only see the checkbox on the desktop version. On the online version, the only option is to enter a foreign address and select the country. I’ve done that, but and I get 27.5y.

AmyC
Employee Tax Expert

why on a foreign property rented since 2012 turbotax forces the depreciation period to be 27.5y instead of the correct 40 years? how can i correct this?

The desktop version has more features than the online version. Sometimes the desktop version is the only solution, as in your case.

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pk
Level 15
Level 15

why on a foreign property rented since 2012 turbotax forces the depreciation period to be 27.5y instead of the correct 40 years? how can i correct this?

@RbrtLoi , you have access to both  versions ( on-line and desktop )?  Neat.

This may be superfluous --- IMHO, whenever I have had reason to change from "prepared for me " to "prepared by me "  ( like when returning from years of foreign assignment  to home base ), I have always  bought the  prior year  desktop software and prepared a "base" return to match  that prepared/filed for me.  This allowed me a base to start for the following/current year and also fully understand the work of the tax professional.  Hence, and if you have the time/desire , consider buying the  desktop TurboTax for 2024, duplicate the return ( in every detail ) prepared by the  CPA/Tax Professional  and use this as entry point for the 2025 return.   In your particular case this would allow for the accumulated depreciation to be correct for 2025.    Obviously this is more expensive path but gives one a solid basis for the future path forward.

 

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