New solar panel deduction for home office

[Deb B1]

In 2020 I had solar panels installed on my home.  My home office is in my home, taking up 11% of the area.

According to what I have read from the IRS, the solar panels should be either depreciated over 5 years, or I can deduct the full amount (which I understand is only 87% - 100% minus half the current year tax credit of 26%).

When I enter the solar panels in the business deduction section under assets, it automatically makes it depreciated over 39 years.  I tried to go into the depreciation chart and override to 5 years, but it won't let me.

A post from 2019 from Marilyn G in the turbotax forum says to....

If it is a business property on Schedule C, you can add it as a business asset under Business Expenses (screenshot).  Answer Yes to improvements made to a building used for business.  

You will then come to a screen stating that you may be able to take the improvements as an expense if you qualify (screenshot).  It not, select 'Intangibles, Other Property' as type of asset, and Other Asset Type. 

For Asset Class, choose 5-year from the dropdown menu (screenshot). 

I am unable to do this, as there is no drop down menu.

I go to Business Expenses/Home Office Expense/Home Office Asset Summary

select improvement to your home

enter in my information and the cost and the date

confirm the business use percentage

There is NO way for me to adjust the Asset Class.

I'd appreciate some help because I am stuck.

[SundayInSalem]

Do not enter you solar panels in the home office section. Enter them as Assets on the business summary screen that displays your General Info, Income, Expenses and Assets.

1. On the Business Asset Summary choose Add an Asset
2. Select Tools, Machinery, Equipment, Furniture
3. Construction machinery and tools
4. Enter your information

This will create a five-year asset and you'll have a chance to claim Section 179 deprecation.

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[Deb B1]

Thank you so much for your help.  I was able to follow your instructions.  A few points...

1. turbotax put the "tools" as 7 years, not 5 years

2. according to what I've read I'm only able to deduct 87% of the cost of the solar panels (as I need to subtract half of the percentage of the federal solar tax credit I get, which this year is 26%).  However there is no way to force turbotax to only deduct 87% of the cost of the solar panels, so it is deducting all 100% (multiplied by my percentage of the house that I use for business).

Any ideas?

Thanks

[SundayInSalem]

Sorry I gave you the wrong one. Construction machinery or equipment will give your 5-years.

To get 87% you can either enter the cost as 87% or tell TurboTax "No I have not used this item 100% of the time for this business and enter 87% on the screen Tell Us More About This Asset / Large Purchase.

[AbrahamT]

It's right here

Business Expenses/ Asset & depreciation

Intangibles, Other property

Other asset type

Describe the Other property Solar panels,amount paid for it, Date purchased

then this screen

And then here

Enjoy!