turning homes to rentals and back again

[danlutterman]

To verify my assumptions on how to calculate past depreciation on a property.  I originally put a home into a rental on 2/1/90. I used it as my home again on 3/1/16

My cost were 58740 and land of 51260 , purchased new on  1/1/88.

I checked NO ( I have not always used property for business use) The percentage of use business  in 2020 was 75%

To establish my new depreciation : 

I multiplied my annual past depreciation of $2136 by the number of years taken (26) with a total of $55,536.

That was the number I entered for the amount of depreciation taken in prior years. 

Does all that sound correct???

[ErnieS0]

Using TurboTax 2016 I get $55,517 ($55,269 prior depreciation + $445 2016 depreciation). Ideally you should try and find your 2016 return and use the amounts provided there in case there is a discrepancy.

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[danlutterman]

Sorry for being such a meathead.

Everything I had on previous message was correct except on the date for my return to use as a home. It was actually 10/1/2016. I'm bad.

The depreciation WAS $2136.00 in 2016.

Realizing that I still come up with $55,536.

If I allow Turbo Tax to calculate it comes up with 5,610.

Regardless if I change it to my calculation of 55,536 or not , my new depreciation comes out to zero,

I assume because I have run through a full depreciation cycle??

[ColeenD3]

Your property is almost fully depreciated. Your yearly depreciation amount of $2136 only counts for full years. The beginning and ending years are prorated. Since you placed your property in service in February your first year, your percentage is 3.182, not the 3.636% for a full year. You also took it out of service in March.

Mid-month convention used.

If you dispose of residential rental or nonresidential real property, figure your depreciation deduction for the year of the disposition by multiplying a full year of depreciation by a fraction. The numerator of the fraction is the number of months (including partial months) in the year that the property is considered in service. The denominator is 12.

Example. Pub 946 

 

On July 2, 2018, you purchased and placed in service residential rental property. The property cost $100,000, not including the cost of land. You used Table A-6 to figure your MACRS depreciation for this property. You sold the property on March 2, 2020. You file your tax return based on the calendar year.

 

A full year of depreciation for 2020 is $3,636. This is $100,000 multiplied by 0.03636 (the percentage for the seventh month of the third recovery year) from Table A-6. You then apply the mid-month convention for the 2½ months of use in 2020. Treat the month of disposition as one-half month of use. Multiply $3,636 by the fraction, 2.5 over 12, to get your 2020 depreciation deduction of $757.50. 

[danlutterman]

I understand and agree with everything you have told me.

I have found my prior depreciation on my "depreciation and amortization report" of 2009. As of that date my prior depredation was $38537. From 2009 until 2015 ($2136 times 7 years) would be $14952 . My 2016 depreciation was $1750. That all adds up to $55239 by my calculations.

Now with that understanding (and I believe it to be correct) I should still have about 1.5 years of depreciation left.

My costs/net land  is  $58740 and land is $51260. That still give me $58740minus $55236 leaves me with $3504 worth of depreciation left. Have I missed something?

No matter what I try I cannot get my Turbo tax to come up with anything like that . its like I'm missing a form to put passed depreciation in. I always come up with zero depreciation for this year. I am apparently missing something somewhere