Depreciation of van >6,000lbs over multiple rental properties... need help.

[nutbrain]

Hello- I realized I made an error in depreciation for last year's taxes when calculating deprecation for this year's taxes. Here's the scenario:

Purchased van during covid in 2020 for use on rental properties, it was delivered and put into service 11/1/20 and in the first year used on only one rental property (Property A), so reporting using MACRS, I took a deduction of 5%(using MACRS tables for 200DB MQ for first year)  on 71.97% business use of full cost basis.  That was easy.

In 2021, however, business use was 67.65% for property B, 3.45% for property A, and 1.14 % for property C (72.4 total business use among 3 properties) and the rest was for personal use.

My error (I think) was that I used Turbotax to calculate using 2nd year MACRS allowed depreciation of 38% of adjusted basis (Original basis minus prior year depreciation 2020) for property B, and SL(20%) of adjusted basis for properties A and C, and because each property had its own depreciation calculated by Turbotax, the basis wasn't adjusted correctly in the program.  That's how it was filed last year and I didn't realize the error until this year when I started the spreadsheet.

How should I have started depreciating the asset in first year.... should I have started with an alternate SL method over 5 years? or continue with MACRS for those rentals where business use is over 50% and use SL for those where it's under 50%?  And am I correct in keeping a single spreadsheet to track the single asset and combine all depreciation taken in every rental property for its use and subtract that entire amount from basis each year?

It'd be easy if all the rentals weren't independent of each other and separately reported on Schedule E, but they are.

I'm keeping a master Asset life history spreadsheet for my records showing each year deprecation for each property and calculating total depreciation in all three properties for each subsequent year.

How best can I keep track of this? Turbotax isn't really helpful for this, so I assumed I'd just have to keep my own records and override Turbotax's calculation, because if I calculate for each property using TurboTax, I'm double or triple dipping deprecation.  Do I need to go back and amend my 2021 return or just report correctly in 2022?  The difference in total depreciation is $44 in my favor... should I just wait and see if the error is found this year, and just keep good records to explain the variance? The IRS and I would probably spend more in our time correcting this than if they just notice the error and bill me for it, as I think I could explain it pretty easily once I figure out the correct method to use.

Thanks in advance-

Nutbrain

[tagteam]

I'll page Champ @Mike9241

[nutbrain]

Thanks, tagteam! Appreciate your speedy reply, and hopefully @Mike9241 will be able to help. Love this Turbotax community!

[Mike9241]

Turbotax can't properly handle the allocation and I don't think there's a way to get proper results. that's because unless you're using standard mileage for each (you can't mix and match). it's not possible to enter the vehicle on each property and then allocate the expense based on mileage on schedule E directly and if you enter the mileage for that property in the vehicle section depreciation may be improperly computed.

now if you choose to aggregate all the rentals, not sure how this is done (residential can only be aggregated with other residential and commercial can only be aggregated with other commercial), but then the aggregation gets treated as one property  so if you only have say residential you can enter all the vehicle info on the first property.