Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
flk384
New Member

If you buy and sell an asset in the same year, is there depreciation? I thought there wasn't but turbo tax is calculating some.

I placed a rental property in service in may and sold it in September, turbo tax has calculated depreciation on the building but I thought if it was placed in service and sold the same year that there wasn't any depreciation. 

6 Replies
DS30
New Member

If you buy and sell an asset in the same year, is there depreciation? I thought there wasn't but turbo tax is calculating some.

Yes - there is depreciation for the months that the rental was available for rent during the calendar tax year even if the property was not actually rented during that period and even if you sold the property in the same year that the property was placed as a rental.

The IRS will assume that you claimed the correct amount of depreciation every year or part of the year the rental property was available for rent - this is true regardless of whether or not you actually claimed any depreciation on your tax return so you will want to claim the deprecation.

Click for more information about depreciation on rental property

tagteam
Level 15

If you buy and sell an asset in the same year, is there depreciation? I thought there wasn't but turbo tax is calculating some.

Probably a very old thread, but inaccurate with respect to real property depreciation.

 

Excepted property.

.......you can’t depreciate the following property.

  • Property placed in service and disposed of (or taken out of business use) in the same year......

See https://www.irs.gov/publications/p527#en_US_2019_publink1000219034

kap600
New Member

If you buy and sell an asset in the same year, is there depreciation? I thought there wasn't but turbo tax is calculating some.

I believe the rule depends on the type of property.  Personal property bought and sold in the same year cannot be depreciated (eg:  MACRS 5 or 7 yr propety).

 

But, real property, such as a rental house, can be depreciated.   Because the convention is mid-month, depreciation will be calculated based upon the start date and suspended based on the sale or disposal date.

martinmarks
Level 10

If you buy and sell an asset in the same year, is there depreciation? I thought there wasn't but turbo tax is calculating some.

Pub 527 IS for real property.....residential rental property.....read the title and then find the spot where it says that you can't depreciate property acquired and taken out of service in the same year.....but the IRS probably meant it was limited to personal property.

JGCPA
New Member

If you buy and sell an asset in the same year, is there depreciation? I thought there wasn't but turbo tax is calculating some.

TurboTax does depreciate rental property bought and sold in same year. Is that a contradiction to Pub  527 listed below. Which is correct. 

martinmarks
Level 10

If you buy and sell an asset in the same year, is there depreciation? I thought there wasn't but turbo tax is calculating some.

TurboTax does depreciate rental property bought and sold in same year. Is that a contradiction to Pub  527 listed below. Which is correct. 

I'd go with the IRS publications and not Turbotax......probably a wash anyway because you're deducting and recapturing the same amount of depreciation and it's OK if you're talking about real estate.

Dynamic AdsDynamic Ads
Privacy Settings
v