Schedule E Worksheet - Land - Change Asset Type

[casandrableu]

I have two rental properties but I am receiving this error for only one.  It states if the asset is entirely comprised of land, change the asset type code to X.  Why?  I believe this has been previously identified as rental real estate; not sure.  Any information/link to relevant IRS information would be helpful.

[ColeenD3]

Go back over your entries. It is possible that it was recorded as land instead of real property.

[casandrableu]

Could you please clarify. 

Are you stating changing the form to an x is incorrect?  That I've made an error in 2019 for this rental property.  Recording "land" instead of "read property?"  If my understanding is correct, could you please tell me where I made this error? 

FYI:  Currently, the worksheet shows on line 1 description of the asset as "LAND."  Date acquired/date placed in service is 4/2/04.  Line 5 shows the type of asset as I - Residential Rental.  The error message notes the asset type should be X. 

Thank you.

[ColeenD3]

The entry would be in the depreciation section.

[casandrableu]

I did not review this section for this year (2019).  Haven't for years. 

This section appears to be asking about deprecation.  The error message on the worksheet is about the land which is not being depreciated.  I confirmed on the Form 4562.  

[VictoriaD75]

Land is not a depreciable asset. If it is the land associated with the property, it should be listed with the value of the property. Then land and the structure are valued separately. Only the structure is depreciable.

Review the Property Profile. There is a screen title Enter Property Tax Values. This is where you list the value of the land separately. 

[dakiona]

This is the first year I've received this notice to change the land code from O to X, for a non-depreciating asset.  When I changed to X it also said to remove the date placed in service, which is 1997.   Why the change?  It's been recorded in its current state since I began using Turbo Tax several years ago.

[casandrableu]

Hi,

The information/assistance I received was not helpful (for example, land is not depreciated).  No clarification/IRS reference regarding why there's an issue with how the asset is presented on the worksheet.  When the worksheet correctly identifies those assets which are & are not depreciated.  You will not be able to file electronically until this "error" is corrected.

I changed the presentation of the supporting worksheet for this item so that land was not separately identified; adding it the structure.  This is done in the deprecation section.  Once land was deleted, the other asset (title) was updated and the dollar amounts of each portion could be noted.  Once you perform this step, just confirm your depreciation calculation for 2019 before and after this "correction" meets expectations.