Does turbotax determine depreciation based on GDS or do I calculate it

[mftempleton]

I filled out a return last year and I am trying to ascertain three things: (i) how I came to the annual depreciation for a property I own; (ii) how I came to the total depreciation so far; and (iii) how this year's Turbo Tax form should be managed. It seemed that this year's Turbo Tax form showed me last year's values and asked me to agree this was right. But let me leave issue (iii) aside for now. In terms of issues (i) and (ii). Researching the basic things again (based on my notes) it seems clear that I needed to ascertain basis and then using the 27.5 year approach and the mid-month approach remove percentage values of the full amount according to table A-6 from document p946, and page 72. The issue I have is that according to Turbo Tax my depreciation as calculated last year is about $10 different for each year from the amount this calculation gives me! What I'm wondering is the following ... is it possible that actually either (a) Turbo Tax takes the value information and the point you put the property in service and calculates the depreciation itself? or that (b) I consulted some IRS table which offers up the value of basis in a large number of intervals and then tells you the depreciation which applies? I can't see how otherwise I'd have ended up with these slightly different values. Regarding point (iii), if there is any straightforward way to clarify how Turbo Tax allows one to either make changes to or not the existing depreciation rate, and in particular whether on the usual screen that we see the user is needing to update the total depreciation for the property to reflect 2024's depreciation or not (I had the impression it was showing me the total depreciation inclusive of only 2023 and seeming to ask me to agree to that...), that would be useful.

[DianeW777]

The answer to the key questions are listed here for you:

1. (i) how I came to the annual depreciation for a property I own. The 27.5 year chart you reference for residential rental property is correct. It is calculated on the straight line mid month convention or (SLMM). It has been in place probably since 1986. TurboTax uses the same chart however calculations will vary slightly. The IRS does provide approval of software testing.
2. (ii) how I came to the total depreciation so far. TurboTax will calculate the accumulated depreciation for all prior years based on the date placed in service. You can actually take the chart, begin with the month placed in service then add to that the percentage for all full years the property was in service. If you multiply that total times your cost basis (less land) you will arrive at a very close number shown in TurboTax.
3. (iii) how this year's Turbo Tax form should be managed. There is nothing you need to manage or change in your  TurboTax return for this rental house property. Make sure in your calculations you are not including the land portion. 
   1. In the rental asset, TurboTax asks for the full price of the rental, then asks for the land portion of the cost. There is no depreciation calculated for the land cost because it is an appreciable asset.

Please update here if you do need further assistance and we will help. The chart you reference is included here for your convenience.