Form 1041 Schedule E depreciation when section 645 election ends

[Oregon_User]

After my father's death in late 2022, a section 645 election was made to treat the grantor's trust as part of the decedent's estate for two years. The two year period ended during December 2024 at which time the estate closed but the trust stayed active. A final 1041 return for the estate is being prepared for the period of Jan 1-Dec 9, 2024. An initial 1041 return for the complex trust will cover the period from Dec 10-Dec 31, 2024.
How can depreciation of a rental house owned by the trust be split properly between these two 1041's in TurboTax Business 2024?  There should be 344 days of depreciation for the estate 1041 and 22 days of depreciation for the trust 1041.  I don't see how to do this on Schedule E in TurboTax Business.

[M-MTax]

I think the estate's final should be easy; just convert the property to personal use (or similar) so that depreciation stops after the 9th.

I also think you might not be able to do the trust's initial unless you use forms view and make manual adjustments. I'm not sure how the program functions but would be willing to be it won't accept the dates and accumulated depreciation in the interview.

[RobertB4444]

If you set the date of disposition for the estate as of December 9th and then the date of acquisition for the trust as of December 9th it should be fine.  The basis transfers so set the starting basis in the trust to the same as the ending basis in the estate.  

@Oregon_User 

[M-MTax]

 The basis transfers so set the starting basis in the trust to the same as the ending basis in the estate.

Don't think you can do it in the program.

The basis is a carryover basis from the estate so the placed-in-service date would be prior to the start date of the new trust (and Turbotax Business does NOT like that).

In this case, the placed-in-service date would be the date of death of the decedent, which occurred in 2022. Forms view is probably needed to resolve this.

[Oregon_User]

Thank you. Yes, I agree, using the forms view is necessary for some of the things I've been doing, but even with forms view I'm having a hard time with some of it.  For instance, TurboTax records a full month of depreciation in December for the rental property even through the final Estate 1041 ends on 12/09/2024. I was expecting it to split the depreciation for December between the final Estate 1041 and the initial Trust 1041, but it doesn't seem to do so.  Also, another detail: the rental property has always been an asset of the Trust, so even though I need to create an initial Trust 1041 at the end of the section 645 election, the rental property should (in my opinion) continue smoothly depreciating through the whole year of 2024. However, I haven't discovered how to make this happen in TurboTax yet.

[Oregon_User]

Thank you, I will look into your suggestion.  TurboTax records a full month of depreciation in December for the rental property even through the final Estate 1041 ends on 12/09/2024. I was expecting it to split the depreciation for December between the final Estate 1041 and the initial Trust 1041, but it doesn't seem to do so.  Also, another detail: the rental property has always been an asset of the Trust, so even though I need to create an initial Trust 1041 at the end of the section 645 election, the rental property should (in my opinion) continue smoothly depreciating through the whole year of 2024. However, I haven't discovered how to make this happen in TurboTax yet.

[Oregon_User]

Thank you, I will look into your suggestion. The rental property was an asset of the Grantor Trust since long before the Grantor died and was never an asset of the Estate itself. So even though I need to create an initial Trust 1041 at the end of the section 645 election, the rental property should (in my opinion) continue smoothly depreciating through the whole year of 2024. However, I haven't discovered how to make this happen in TurboTax yet.