AMT depreciation

AMT Depreciation Adjustments

If an accelerated depreciation method is used, a taxpayer may be subject to an alternative minimum tax (AMT) depreciation adjustment.

 

AMT adjustment required

 

Depreciation must be recomputed for purposes of the AMT for the following property.

• Property placed in service after 1998 that is depreciated for regular tax purposes using the 200DB method, except for qualified property eligible for the special depreciation allowance.

• Section 1250 property placed in service after 1998 that is not depreciated for regular tax using the SL method.

• Tangible property placed in service after 1986 and before 1999.

 

Please click here for more information. Information about these calculations starts on page 5. 

Hi,

 

I have the same question about how the Adj/Pref value in Form 4562 was calculated.

 

In  my case, Line 1 in Schedule 2 is $0/empty. Line 11 in Form 6251 is $0. This means I do not own AMT, right?

 

Why depreciation amount was adjusted then? And when depreciation amount was increased, this will increase the expense and reduce the rental net income. Can not understand the purpose and logic of depreciation adjustment.

 

Can someone help me here?

 

By the way, TurboTax Form Mode is not good at tracing back values. And this is not convenient for users to check the result.

Hello,

 

TT is calculating an adjustment in the AMT depreciation, even though my properties do not hit any of the AMT requirement. In our prior year return (2023), we had no AMT depreciation either (not filed with TT). What can I do so that TT is not doing the AMT depreciation for my properties? These are foreign residential properties that we rent out to others that are in service in year 2021 and after. Last year all properties use straight line 30 years depreciation.

 

Thanks a lot in advance for any tips on this.

 

@sc98 I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

 

TurboTax Online:

1. Sign into your online account.
2. Locate the Tax Tools on the left-hand side of the screen.
3. A drop-down will appear. Select Tools
4. On the pop-up screen, click on “Share my file with agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token Number that was generated in the response.

TurboTax Desktop/Download Versions:

1. Open your return.
2. Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent” *
3. This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.
4. Please provide the Token Number (including the dash) that was generated in the response.

*(If using a MAC, go to the menu at the top of the screen, select Help, then, “Send Tax File to Agent”)

 

@MaryK4 Thanks a lot for your kind reply.

 

I figured out that if I use the desktop version, I am able to change the depreciation method for both AMT and normal depreciation to 30 years (for foreign properties) and use the straight line depreciation. By doing so, there won't be any delta between AMT and normal depreciation. So, this wouldn't impact my tax return, even though AMT depreciation is calculated.

 

So, I think it is fine to have the AMT depreciation in there. Thanks again for your help!