Amortilzation of rental property - Fed and State tax

[wangwx75]

1.  This is my first year to use Turbo Tax instead of professional tax agent.  The last year return has an Appreciation and Amortization Report to store the detailed information: when they start, how much in total and how much has been deduct and the amount for each year, but Turbo tax only have this report for Appreciation.  Where is the report for Amortization, like closing cost, ...?  where to input these information for amortization?

2.  The Amortization for my rental property is $251.  I put in Other Expense.  In Federal tax return, I have rental income, which included the deduction of this $251, but in NJ state tax Schedule NJ-BUS-1, Part IV deduct this amount again as NJ Depr-adj, so the rental income for State NJ will $251 less than Federal return.  Is this a problem?  

[KathrynG3]

1. The amortization is reported in the same area of your return as depreciation. Amortization is for intangible assets.

To enter amortization in TurboTax Online, follow these steps:

• From the left menu, select Federal
• Income & Expenses>Self-employment Income & Expenses>Review
• Review
• Add expenses for this work
• Scroll down to Assets, highlight the radio button and scroll all the way to the bottom to click Continue
   
• If you have assets already, select to go to the Asset Summary. If you don't, add an asset
• On the Describe This Asset screen, chose Intangibles, Other Property and click Continue
• Tell Us a Little More is the next screen to help describe the type of intangible and enter your details

To enter amortization in TurboTax CD/Download, follow these steps:

• From the Business Tab, Business Income and Expenses will be open. Click Continue
• I'll choose what I work on
• Business Income & Expenses click Update
• Click Yes and Continue through until you get to Here's the business info we have so far. Click Edit next to the Business
• Scroll down to Business Assets and click Start/Update
• Continue through any introductory questions about large purchases, improvements to the building or items over $2,500 until you get to Describe This Asset
• Select Intangibles, Other Property and click Continue
• Tell Us a Little More: Referring to how this amortization was labeled last year, either as land improvement, goodwill or something else, answer the categorizing question and click Continue
• Follow through the rest of the questions to enter your details

2. Yes, that is a problem. Regarding New Jersey, when the initial listing is in the appropriate section, it should carry to New Jersey automatically. It is a best practice to automate your asset schedule as much as possible, so it is easier to maintain going forward. It was smart of you to verify what was happening with this expense. 

For your reference, click this link for more information about depreciation. 

• Depreciation of Business Assets
• Section 179 depreciation
• Bonus depreciation
• Safe Harbor Election - do not depreciate items that cost less than $2,500 each.
• IRS Publication 946

[Edited 3/21/2020 | 3:06 PM PST]

@wangwx75 

[wangwx75]

Dear Kathryn:

Thanks for your instruction, but it seems we are not in the same page.  I used Turbo Tax Premier Window version.  I do not see the menu you mentioned.   When I enter Turbotax, I see on the top menu:

PERSONAL INFO, FEDERAL TAX, STATE TAXES, REVIEW, FILE

When I enter FEDERAL TAX, I see 'Wages & Income', going forward, I see 'Rental Properties and Royalties, ...'   I don't see anywhere TurboTax allow me  to enter amortization information.  An accountant did tax return for me last year.   He has a page 'appreciation report and amortization report', but this year Turbo tax has only depreciation report.  Do you mean combine depreciation and amortization together as depreciation?  Thanks.

[DaveF1006]

Yes, this all regarded as depreciation for the rental property. There is no separation between depreciation and amortization.