topic Re: different property depreciation in Get your taxes done using TurboTax

different property depreciation

jnaka — Tue, 08 Feb 2022 01:48:13 GMT

I had my tax return done by my accountant last year and I am doing it myself for the first time this year with Turbotax.

After input all required information, my property depreciation is different from the record from my last year tax return. I guessed the different is year to fully depreciate while Turbotax is 27.5 years, my accountant used 40 years so the number from Turbotax is $5,174 vs $2,385 from last year record.

How do I fix this? There is no where to adjust the "year to fully depreciate" in Turbotax.

Re: different property depreciation

Mike9241 — Tue, 08 Feb 2022 02:30:46 GMT

tell us is it US or foreign property and the year placed into service?

over the last 80 years, there have been numerous changes in depreciation lives and methods. for example, residential real property acquired and placed in service before 3/16/1984 could be depreciated over 15 years now for US property it's 27.5 years straight-line with mid-month convention .however, nothing in the laws allowed you to change from the method used in the year acquired to what new law allows. at some points, there were even different lives and methods for regular tax purposes and AMT tax purposes.

if you want to read up on depreciation read pub 946 (2021 version not available at the time of this posting but only minor changes for listed property)

https://www.irs.gov/pub/irs-pdf/p946.pdf

Re: different property depreciation

jnaka — Tue, 08 Feb 2022 03:14:26 GMT

Hi, Thanks for your reply.

It is foreign property in Tokyo, Japan and that year placed into service is 2015.

Re: different property depreciation

MarilynG1 — Tue, 08 Feb 2022 04:26:11 GMT

Foreign property placed in service before 2018 will be depreciated over 40 years.

Click this link for details on Depreciating Foreign Property.

Re: different property depreciation

jnaka — Tue, 08 Feb 2022 18:27:01 GMT

I input Japan as a country of the property and 2015 placed into service but the depreciation life is still 27.5 years. Is there anywhere that I can adjust this number of depreciation ?

Re: different property depreciation

ColeenD3 — Tue, 08 Feb 2022 18:49:07 GMT

Yes, when it asks what the address of the property is, there is a drop-down box that allows you to click "foreign".

Re: different property depreciation

jnaka — Tue, 08 Feb 2022 19:02:03 GMT

yes, I did that as below.

Re: different property depreciation

Critter-3 — Tue, 08 Feb 2022 19:16:03 GMT

The online program will default to 27.5 years ... to do this correctly you will need the downloaded version.

Re: different property depreciation

jnaka — Tue, 08 Feb 2022 19:17:51 GMT

I am using the download version, Premier 2021, Federal and State returns

Re: different property depreciation

jnaka — Tue, 08 Feb 2022 21:50:44 GMT

Hi, thanks all for answering my question. I found another drop down menu for property outside US and got the 40 year depreciation life.

However, the number is still different, $3666 from Turbotax vs $2924 from previous year.

Then I found form 4562 from the previous year tax return done by my accountant and the depreciation amount is in Part III, MACRS Depreciation, Section A, item 17, "MACRS deductions for assets placed in service in tax year beginning before 2020". Is that the reason the number is different? How can I do that?

Also, I input all my information but don't have form 4562 from my Turbotax, how can I get that form?

Thanks.

Re: different property depreciation

Critter-3 — Wed, 09 Feb 2022 00:44:21 GMT

You must use all the basis info from the prior year depreciation worksheet and you will not get a form 4562 unless you place new assets into service. Switch to the forms mode and look at the depreciation worksheet to see which base amounts are not the same.

Re: different property depreciation

jnaka — Thu, 10 Feb 2022 19:39:57 GMT

I input all the information but still could not get form 4562. This form 4562 was included in my tax return done by my accountant every year including last year.

Re: different property depreciation

Critter-3 — Thu, 10 Feb 2022 19:48:20 GMT

The 4562 is only printed/generated if required. So long as their are no changes from the prior year, it's not required. Things that will generate it are adding an asset, removing an asset, and selling or otherwise disposing of an asset.

If the 4562 is not required then you will only get the 4562 worksheet for depreciation.

Re: different property depreciation

jnaka — Thu, 10 Feb 2022 20:06:40 GMT

Thanks for your answer about 4562.

About foreign rental property depreciation I have 2 questions as below.

1. Based on the "depreciation detail listing" form from last year tax return, my accountant used the "basis adjustment" to deduct from the cost of the property and get the "depreciation basis".

First, I input the cost of the property in Turbotax but got the different amount of depreciation and there is no option to input "basis adjustment" so I changed the number of cost of property and used the amount from the "depreciation basis" (real cost minus basis adjustment) from last year and got the same depreciation as last year. Can I do this ? The cost shown in the "depreciation detail listing" form will be different from last year then.

2. Last year "depreciation detail listing" showed SL MM as a method but what I got from Turbo tax is ALT/MM, how can I changed the method to be the same as last year?

Re: different property depreciation

SG81_Stefan — Tue, 25 Feb 2025 04:26:51 GMT

I have the same issue. A 2017 German rental property. I use the TurboTax premium online version.

My tax consultant has been depreciating it as 40y, method = AML, Conv= MM.

Turbotax shows 27.5 years, method = SL, Conv=MM. Hence I get a different depreciation amount.

I have entered it as a property with a foreign country address = Germany, in use as of 10/01/2017.

I discussed it with a live support person from TurboTax but she could not solve it.

appreciate the input! Stefan

Re: different property depreciation

JamesG1 — Tue, 25 Feb 2025 16:23:18 GMT

When entering the rental asset in TurboTax Premium Online, you may be able to replicate the method used by the tax consultant by selecting Intangibles, Other property at the screen Describe This Asset.

Be advised that the software warns you to Only select this option if you are well versed in the concept and rules of depreciation.

At the screen Confirm Your Prior Depreciation, you may enter the Amount of Depreciation Taken in Prior Years.

@SG81_Stefan

Re: different property depreciation

SG81_Stefan — Sat, 01 Mar 2025 15:07:30 GMT

James, I found it.

Under the rental property info, it is not enough to input a foreign address.

On top, one needs to say "yes" on the question "Reservation, disaster or outside US area". When doing that, the years to fully depreciate changes to 40. Thanks all, Stefan