How do I enter information from a cost segregation study?

[LaShaunA3 · Accepted solution]

You’ll need to enter each asset category from the cost segregation study separately for depreciation. Enter each asset using the cost and date placed in service from the study, select the correct asset type, and the software will apply MACRS and any applicable bonus depreciation.

[TWO_TODDS]

Thank you.  This is what I was looking for.

[user17733467997]

How does the bonus depreciation from the cost segregation get handled?

[LaShaunA3]

Bonus depreciation from a cost segregation study is handled by entering each asset from the study separately in the depreciation section of TurboTax. TurboTax will automatically apply any eligible bonus depreciation for the shorter-life assets when you enter the cost and placed-in-service date.

[user17733467997]

Thanks for your answer.  I was able to do it properly (i think) for a property placed in service for 2025 (the same year).  However, I have another property that has been in service for several years.  How do you do it for that situation?   I have all the information.  I just don't know how to put in the information for this scenario.

[MaxA1]

Since the property has been placed in service for "several years" you would need to file Form 3115 to report prior-year depreciation that was never taken in the current year.  Form 3115 is only available in TurboTax Desktop and you will need to fill it out manually.  Here's an IRS link that gives more information about Form 3115:

• About Form 3115, Application for Change in Accounting Method

@user17733467997 

[stephenwu]

Can you provide step by step instructions? I don't know how to enter multiple items in a rental house.

[MarilynG1]

If you have your rental property set up in the Asset section, you can add other assets in the same section.  At the Asset Summary page, choose 'Add an Asset' and choose the type of property.  Appliances, carpeting, etc. are under 'Rental Real Estate Property'.  Give a description, Cost, and Date Purchased.

You're then asked 'How Do You Want to Deduct this Item?' and are given several choices.  Here's more detailed info on Depreciation of Business Assets and Rental Real Estate and Taxes to help you. 

@stephenwu