My property depreciation in turbotax is much higher than the one I reported last year. I cannot change it in turbotax. How can this be fixed?

[MayaD]

It could be that the depreciation for 2019 was not calculated for the whole year. If you purchased the property sometime after beginning of 2019, depreciation charged for that year will be proportionate to the time the property was actually used in business during the year. 

[car777]

Thank you for the reply, but the property was purchased over 10 years ago, and the CPA I used in the past used the same amount throughout theae years. I do noy have access to the CPA, and being this the first time using turbotax, I do not know how to fix/change the higher depreciation calculated by turbotax.

[DaveF1006]

It depends. Your CPA may have used the depreciation for your building only.  Some people mistakenly report the full purchase price of a property, which includes land. Land is not depreciable and must be keep separate from the home. You would need to look at your past tax returns to see what amount your CPA reported as a depreciable asset. This is found on a form 4562 in last year's return. If it is a lower amount than what Turbo Tax reported, it may mean you did not deduct your land depreciation. 

Follow these steps when entering your depreciation in Turbo Tax. For the sake of brevity, i will just list the steps in the Asset/Depreciation portion of the return.

• Under the asset/depreciation section - select start
  • Select "yes" to "Do you have assets for this property that can be depreciated?
  • About 3 screens in, you will enter the house as an asset here. This is where your enter all your rental assets (including capital improvements) 
  • For the rental house (or any capital improvements), you will select  "Rental real estate property"
  • Then for the rental house, select "Residential Rental Real Estate"
  • On the next screen, you will enter information about your Rental property asset including:
    • Property description - usually street address (type of capital improvement)
    • Cost - generally what you paid (if this is a conversion of your primary residence, then you would use the lesser of FMV at time of conversion or cost.)
    • Cost of Land - If cost, as listed above, includes land, put the total amount of land cost here (land is not a depreciable asset)
    • Date purchased or acquired - this is the original date of purchase or acquisition of the rental house.
  • On the next screen report purchased new or sold in current year and your business use of the property since acquisition.
  • You will then get a screen that will confirm prior year deprecation (If asset is over one year old) Just remember that the IRS assumes that you have taken the correct amount of deprecation on your rental asset regardless of if you did or did not). If you change this amount, TurboTax will calculate a new straight line depreciation amount using the new basis information (cost less prior year depreciation) over the assets remaining life.

[sidawg]

If you used the original cost (much lower) instead of the FMV at the time of conversion from primary residence to rental, should you start with a new SL calculation for depreciation?

[PatriciaV]

If you reported an incorrect basis in the year of the conversion from personal use to rental property, you have two choices: 

1. amend all prior tax returns that used the incorrect basis so that you can report the correct basis this year or 
2. adjust the basis and accumulated depreciation on this year's return and manually complete & file Form 3115 Change in Accounting Method. Because Form 3115 is not supported by TurboTax Online in the interview, you may wish to switch TurboTax Desktop (available in Forms Mode). Consult the instructions for this form: Instructions for Form 3115.

@sidawg