Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
iOne
Level 4

Why is TT business calculating $7000 in first year depreciation on a $1.15M asset?

I'm working on a trust return using TT Business.  The trust acquired a residential rental property in August 2018.  I entered this as an Asset under Schedule E.

Type of asset I, basis $1.2M, land $44k.  

TT Business selected MACRS R SL MM, and came up with $7060 in depreciation.  

But manually I come up with $15,768 based on using 1.364% for August from:
https://www.investopedia.com/articles/investing/060815/how-rental-property-depreciation-works.asp

What accounts for this difference?

1 Best answer

Accepted Solutions
tagteam
Level 15

Why is TT business calculating $7000 in first year depreciation on a $1.15M asset?

" Yes, this is in the USA, under IRS rules.  It is a trust so form 1040 using TT Business."

I am getting $15,764 on a test return when plugging in your numbers (see first screenshot).

What can happen is the depreciation allocation can get out of whack where the trust is retaining a portion of the depreciation expense while a portion is being allocated to the beneficiary(ies).

You can change that allocation in Forms Mode in the depreciation allocation section on Sch E (see second screenshot). 

View solution in original post

4 Replies
SweetieJean
Level 15

Why is TT business calculating $7000 in first year depreciation on a $1.15M asset?

Is the property in the USA?
iOne
Level 4

Why is TT business calculating $7000 in first year depreciation on a $1.15M asset?

Yes, this is in the USA, under IRS rules.  It is a trust so form 1041 using TT Business.
tagteam
Level 15

Why is TT business calculating $7000 in first year depreciation on a $1.15M asset?

" Yes, this is in the USA, under IRS rules.  It is a trust so form 1040 using TT Business."

I am getting $15,764 on a test return when plugging in your numbers (see first screenshot).

What can happen is the depreciation allocation can get out of whack where the trust is retaining a portion of the depreciation expense while a portion is being allocated to the beneficiary(ies).

You can change that allocation in Forms Mode in the depreciation allocation section on Sch E (see second screenshot). 

iOne
Level 4

Why is TT business calculating $7000 in first year depreciation on a $1.15M asset?

I solved it in the end by saving the return, and loading it back in to TurobTax.  I made no change, and the number ended up right back at the $15,764 it should have been in the first place.
Dynamic AdsDynamic Ads
Privacy Settings
v