Manually enter depreciation

[MikeSF]

Hi All.. I have tried to manually enter depreciation and use the Land Asset.. 

My depreciation does not total 27.5 Years. 

Asset $616,853  

Started 1/21/2013

Expense $28,430

Prior Depreciation $639,282

Asset 616,853 / 27.5 = $22,429

2022 TT is calculating : $28,430   (28430*27.5 = 781825)

[Anonymous_]

The following is a screenshot from my test return.

[MikeSF]

Why do we have different expense? I cant seem to figure that out. 

[Anonymous_]

Check your prior depreciation as that could wind up changing the current year deduction.

[MikeSF]

Worked!! Thank you. I had to adjust prior depreciation to match 

Cost\27.5 x Prior years.. 

[MarkFL]

Hi MikeSF-

I'm a retired long-time landlord, "Now In Recovery." I carried a lot of rental property for a long time and have been a TurboTax user since 2008. I see your frustration point here for the depreciation calculation. I also see YOUR manual number is incorrect. My manual number is the same as tagteam's reply at $22,431.02.

But there may be something at TT is doing and including that is rendering $28,430. If you haven't filed yet, open up the worksheets for this property (there is a different worksheet for each property) and see if there is something being calculated/carried over that you're not seeing. Be very careful doing manual overrides. In my experience, TT usually knows better. I never messed with TT's depreciation calculations and filed as calculated and (knock on wood) never had a problem. TT is guaranteeing their numbers, so if you manually change their calculation, you could negate their guarantee. But do as you feel is best and as the lawyers say, "Be guided accordingly."

[MikeSF]

Hey Mark. Thanks for the response. I found that I coped "Prior Depr" from my 2021 Federal Depreciation Worksheet. Its from a CPS that I have had for 4 years. So only the prior 4 years are showing on her worksheet. My current depreciation is 22,429. Which is very close to TT. When TT "suggests" previous year deprecition numbers and I accept the numbers work.

I have verified in prior years tax returns that I have been taking depreciation from the start. So my current "Prior Depreciation" is 9 years * 22,429. I went ahead and adjusted my prior year depreciation and everything worked out.

Thank you ALL for you help. 

Another question I have is I have some improvements some years after purchase. When I enter "Improvements" in TT it takes the 15 year depreciation. However the tax code state the depreciation should match the original building 27.5. Do you know where to make that adjustment?

[Anonymous_]

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@MikeSF wrote:

Do you know where to make that adjustment?

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Yes. Use Residential Rental Real Estate instead of another class.