Inaccurate Depreciation Calculation

[Carl]

"One of my challenges is TTX Business will not allow you to put a service date for a property that is before the start date of your company."
That is absolutely correct. There is no way possible your business could put anything into service, before that business existed. What kind of business return are you completing? 1065, 1120 or 1120-S?
" all but 2 of my 7 properties were put in service before the start date of the company. "
No they were not put into service "by the business" prior to the start date of that business. What are you filing? I can (maybe)  help you make things right without having to do any overrides. If you do an over ride, then you completely invalidate the 100% Accuracy Guarantee.

[TaxGuyBill]

Carl, the OP said he was filing a 1065  (Partnership).  When a partner contributes a depreciable item to a Partnership, the Partnership picks up the depreciation where it left off.  So because of that, the "placed in service" date sort of *IS* before the Partnership began.

But as I said before, if you use the date the Partnership began (10/10/15) and leave the "prior depreciation" BLANK, it should calculate the correct current year depreciation.

[Carl]

What you can do is just reduce the asset cost basis (property only, not the land) by the amount of depreciation already taken on the SCH E of the last personal return you reported this property on. Besides, on that last return you had to show the transfer of the property from you personally, to the partnership by indicating you removed it from business use for personal use, the day before the partnership start date.
 Then the in service date will be the partnership start date. This starts depreciation over at year 1 for 27.5 years. I don't see this as a problem provided you, and only you, legally owned the property prior to forming the partnership. This is because you, and only you, were allowed the depreciation (and did take it) prior to the partnership.
If you over ride things, then you are telling the program that "ALL" partners benefited from the depreciation taken prior to starting the partnership - and that's just not true.

[TaxGuyBill]

No Carl, that isn't how it works. It still uses the 27.5 years using the pre-Partnership "placed in service" date.  For example, if it was originally depreciated for exactly 1 year before being contributed to the Partnership, then the Partnership would continue depreciation for 26.5 more years using the original Basis..  

[Carl]

TGBill, the below wording may sound argumentative, and I apologize for that. Not intended that way, so please don't take it that way.
Well, the screen does ask when you purchased/acquired the asset and started using it in "the business". There's no possible way to have used the asset in "the business" before the business existed. Now when dealing with either business or rental assets on a SCH C I have the option to select something akin to "I used this in business before" and it allows me to enter prior depreciation from before. as well as the convention used before. Would you agree that this question is what is missing from Turbotax Business?

[TaxGuyBill]

Yes, I agree that the program is not set up for this situation.  But it is a fairly easy work-around, as I noted above.

[garyt22]

@TaxGuyBill , @Carl . Thank you both for your recommendations and insight,  It is appreciated more than you know.  Thanks to you, I have sufficient information for a "work around" and a better understanding of how the program works.  

[BrianH7]

Does anyone know how TTX calculates the final year depreciation for a rental property that was sold on 8/27/20?

I used the MACRS straight line, mid-month, 27.5 years depreciation system.  I divided the amount to be depreciated over 27.5 years (Cost (Net of Land)) by 27.5 and multiplied it by 7.5/12 (0.625), and I got a different result compared to TTX.