Depreciation on shared rental property

[taxnewbie19]

I inherited a condo with my sister, so we both own 50%. For the Depreciation section, with Fair Market Value, Land Value, & Improvement Value, do I enter the TOTALS or 50%? For expenses etc, I am entering 50%, because if I choose to have Turbotax half everything it incorrectly halves my 1099-MISC (which is already halved) and won't let me override their number. Thanks in advance.

[AlexanderS08 · Accepted solution]

Yes, you are correct to enter 50% for expenses etc. This same rationale would also apply to the basis of the property that you will be asked about when you go to report a sale. For example, if the property was worth $500,000 when you inherited it, you would report your basis as $250,000. This will ensure depreciation is calculated correctly.

[jwang90703]

I am in the same boat.  I am not sure which of the following is better:

(1) I entered my ownership to be, say, 60%.  I then entered 100% of the income, expense, and depreciation.  Turbotax calcuated my share of the income (60%) and expense (60%), it does not touch the 100% of the deprection that I entered.  I override the form and make the depreciation 60%

(2) I entered my ownership to be, say, 60%.  I then enter 100% of the income, 100% expense, and 60%depreciation.  Turbotax calcuated my share of the income (60%) and expense (60%),  it does not touch the 60% of the deprection that I entered.  No override needed.

Can somone tell me which is the correct way?

[ThomasM125]

The second option is correct. You should enter 60% of the value of the condo when you are prompted to enter that value. TurboTax will allocate the income and expenses based on the percentage of ownership, but not the cost basis of the property.