How to use Straight Line Depreciation rather than MACRS which is automatic?

[JustDucky]

turbo Tax automatically calculates MACRS. I want to use straight line depreciation

[Critter-3]

What are you depreciating ?  

[JustDucky]

Water Heater - $877 - Don't want to depreciate in 1 year - have sufficient loss on this rental

[Critter-3]

Ok ... so you don't want the bonus depreciation ... indicate that you do not want to take it to extend the time to depreciate it.

[Mike9241]

a whole-house hot water heater has a life of 27.5 years (an improvement - in Turbotax class I resntal real estate property)  and depreciation would automatically be computed using the straight-line method. 

table 1.1 of IRS PUB 527

*if you wan t you can use the ADS system (automatically straight line but also a longer life) which would spread the depreciation over 30 years about $2-$3 less per year.

[JustDucky]

Yes that is correct

E

[JustDucky]

This is a Condo rental water heater - In the past 25 years, I've replaced it twice -Please tell me exactly how to enter this in 2021 TurboTax.  Thanks

[Critter-3]

In a rental a water heater is like a stove for depreciation ... they are both 5 year property but if you want you can call it an improvement to the property to get the 27.5 option.  Or  opt out of the bonus depreciation to spread it over 5 years. 

Not sure where you are getting lost ... if you really want to have it depreciate longer than 5 years then call it real estate instead of an appliance. 

[JustDucky]

I followed all your instructions UNTIL the screen "How Do You Want To Deduct This Item" - This does not show on my screen.  I'm using 2021 TurboTax Premier.

What your describing is exactly what I want to do - but TurboTax won't let me!  I really appreciate your continued help ( I hope!)

[DianeW777]

You can follow the steps below with the help of the images already provided by @Critter-3.

1. When you describe the asset you should select 'Intangibles, Other property
2. On the next screen select 'Other Asset Type'
3. Continue to enter your asset information.  
4. When you get to the screen Asset Class you should select 5 year
5. Then you will have the option to select straight line depreciation.

Keep in mind that the first year is a half year convention.

As noted above, you also have an opportunity to say it is an improvement to the property that would automatically select a 27.5 year recover period using straight line with a mid-month convention.

[Critter-3]

@JustDucky 

2021 ?   You must be using the downloaded version so switch to the FORMS mode ... that may be easier to work in the depreciation worksheets.  And don't be afraid to poke around and try different things ... before you do SAVE the return AS something so in case you get hopelessly lost you can always start over again from a saved place.  

[JustDucky]

Not using download - using purchased disc - 2021 Premier - the other suggestions I've received end up with depreciation expense of the total $877.  I don't understand why this is happening.

Thanks - will try again

[Critter-3]

The CD is the same program as the downloaded version just a different way to get the installation file that is  installed on your computer as opposed to using the online program. 

[JustDucky]

FORMS Worked!!!!!

Thanks again - sorry for being so long to figure this out

Eileen