You'll need to sign in or create an account to connect with an expert.
TurboTax is correct in using 40 years.
Property outside of the US is required to use ADS, which is 40 years for rental properties that are "placed in service" in 2017 or earlier years.
https://www.irs.gov/publications/p946#en_US_2017_publink1000107510
Regardless of whether foreign residential rental need to use ADS or GDS, 2018 IRS Publication 527 states at the bottom of page 9 (comment 1) that property that was places in service after 2017 should be depreciated over 30 years. But I am preparing my 2018 return for a foreign residential that was converted from personal use to rental on 1/1/2018 and TurboTax still use 40 years.
Can you please explain why it is doing it?
Can you also be specific on where in IRS Publication 946 there is an instruction to use ADS for foreign rental property.
Thanks.
@apollog wrote:Can you also be specific on where in IRS Publication 946 there is an instruction to use ADS for foreign rental property.
It is in the Internal Revenue Code - §168(g)(1)(A) requires the use of ADS for property used predominantly outside the U.S.
You can see the actual recovery period (effective January 1, 2018) in Publication 946 at the link below.
https://www.irs.gov/publications/p946#en_US_2018_publink1000107533
@apollog wrote:....TurboTax still use 40 years.
Can you please explain why it is doing it?
There is a bug in the software, but there is a workaround provided you are using a desktop (CD/Download) version of TurboTax. An override can be made directly on the Asset Entry Worksheet in Forms Mode (see screenshot) and it should not impede your ability to e-file your return.
Ok. I see the work around.
What about the web version. Is there a way to fix it there? maybe to plug-in the correct depreciation amount in form 4562 and/or Sch. E, or increase the property value proportionally to result in the correct depreciation amount - providing it can be changed back in future years.
Thanks.
In regards to the work around in the desktop version. I can get to that specific field, but it does not accept my typing of the override.
@apollog wrote:In regards to the work around in the desktop version. I can get to that specific field, but it does not accept my typing of the override.
Hopefully, you are in the correct worksheet (the Asset Entry Worksheet), but you have to right-click in the box to get the menu options, one of which will be Override (or you can use Ctrl + D).
You will see the number that you enter ("30") in red, which indicates an override.
@apollog wrote:What about the web version. Is there a way to fix it there? maybe to plug-in the correct depreciation amount in form 4562 and/or Sch. E, or increase the property value proportionally to result in the correct depreciation amount - providing it can be changed back in future years.
There is no workaround, of which I am aware, for the Online versions. I cannot recommend changing otherwise correct values for the sole purpose of ameliorating this bug.
Still have questions?
Make a postDid the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.