How do I split depression expense on Turbotax software for the jointly owned rental property for a couple filing married filing separately?Gardnerville, NV

Forum|Forum|4 years ago
April 27, 2022
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TurboTax Premier Online

Critter-3

Level 15

If you had the rental on a prior year joint return and want to split it on 2 separate returns then you will need to enter it on both returns divided by the % that you each own. If it is 50/50 then split all the amounts in 1/2 ... divide the cost basis and the prior year depreciation taken.

toofan1Author

Level 4

Thank you Critter, for your response. I have been separated for two years and I need to get my finances be kept separate from my husband. Filing married separately is the best alternative recommended to us. I live in a community property state. My question regarding depreciation was due to mechanic of getting half of the depreciation for this rental property on our separate return. Splitting income and expenses 50/50 is easy. I can enter those numbers. I just don’t know whether I should divide the cost of the building in half and continue depreciating for each return on that basis. What happens to prior years depreciations? Should those be divided 50/50? The rental property will be mine for 2022 as part of the settlement. Then what should I use as accumulated depreciation if I sell this rental in the future?

VolvoGirl

Level 15

Sorry you are sad. You each need to enter half the asset cost and expenses. That will calculate half the depreciation on each Schedule E.

May I ask why you are filing separately?

It is usually better to file Joint. Joint has the lowest tax rates and the highest Standard Deduction. And if you are in a Community Property state MFS gets tricky to figure out. Here's some things to consider about filing separately……

In the first place you each have to file a separate return, so that's two returns. And if you are using the Online version that means using 2 accounts and paying the fees twice.

Many people think they come out better when filing Married Filing Separate but they are probably doing it wrong. If one person itemizes deductions then the other one must itemize too, even if it's less than the standard deduction, even if it is ZERO!

And there are several credits you can't take when filing separately, like the

EITC Earned Income Tax Credit

Child Care Credit

Educational Deductions and Credits

And contributions to IRA and ROTH IRA are limited when you file MFS.

Also if you file Married Filing Separately up to 85% of your Social Security becomes taxable even with no other income.

See …….

https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately

user17760224361

Level 2

Turbo tax online has restrictions when filing MFJ on Fed and both husband and wife live in different states. In this situation, TurboTax recommends using Desktop version, create MFJ for Fed and make a copy of the file and change status to MFS on state, remove partners income and file State as MFS manually.

How do I prepare a joint federal return and separate state returns?

In this case, if the properties are co-owned, the income, expenses and depreciation has to be split 50/50. What a pain.