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Posted by aemeijers on March 30, 2007, 4:16 am
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Anybody out there familiar with how TurboTax calculates
rental property depreciation? I splurged this year, and
bought software instead of struggling through it by hand.
However, when it got to the part about the depreciation
allowance for the original purchase, as well as the seperate
deprecation schedule for the addition and remodeling, TT
claimed the allowances I claimed in previous years totaled
several thousand dollars less than they should have. I went
back and checked my math, and the percentages that form 4562
and publication 946 say to use, and can't find where I made
any error. Even if I override and correct TT's assumed
number for previous years' totals, it figures this year the
way it wants to, to 'catch me up', apparently.
In a quandry here- do I keep on using the spreadsheet of
figures I have been using, or accept what the software
offers? If I get audited, can I blame the software?
Any advice greatly appreciated- so far this software hasn't
made things any less painful.
aemeijers@att.net
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Posted by bono9763@yahoo.com on March 30, 2007, 11:06 pm
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> Anybody out there familiar with how TurboTax calculates
> rental property depreciation? I splurged this year, and
> bought software instead of struggling through it by hand.
> However, when it got to the part about the depreciation
> allowance for the original purchase, as well as the seperate
> deprecation schedule for the addition and remodeling, TT
> claimed the allowances I claimed in previous years totaled
> several thousand dollars less than they should have. I went
> back and checked my math, and the percentages that form 4562
> and publication 946 say to use, and can't find where I made
> any error. Even if I override and correct TT's assumed
> number for previous years' totals, it figures this year the
> way it wants to, to 'catch me up', apparently.
>
> In a quandry here- do I keep on using the spreadsheet of
> figures I have been using, or accept what the software
> offers? If I get audited, can I blame the software?
>
> Any advice greatly appreciated- so far this software hasn't
> made things any less painful.
TurboTax, as all software programs, calculates the
depreciation based on what you tell it regarding when the
asset was placed in service, what the class life of the
asset is, what convention is being used to depreciate it,
and whether any bonus depreciation was taken. Depending on
how you input the above data, it will affect the total
amount of depreciation calculated. So either you did
something wrong in your calculations (e.g. used half-year
instead of mid-quarter for assets placed in service late in
the year) or input data incorrectly into TurboTax.
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by brownie on March 30, 2007, 11:06 pm
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> Anybody out there familiar with how TurboTax calculates
> rental property depreciation? I splurged this year, and
> bought software instead of struggling through it by hand.
> However, when it got to the part about the depreciation
> allowance for the original purchase, as well as the seperate
> deprecation schedule for the addition and remodeling, TT
> claimed the allowances I claimed in previous years totaled
> several thousand dollars less than they should have. I went
> back and checked my math, and the percentages that form 4562
> and publication 946 say to use, and can't find where I made
> any error. Even if I override and correct TT's assumed
> number for previous years' totals, it figures this year the
> way it wants to, to 'catch me up', apparently.
>
> In a quandry here- do I keep on using the spreadsheet of
> figures I have been using, or accept what the software
> offers? If I get audited, can I blame the software?
>
> Any advice greatly appreciated- so far this software hasn't
> made things any less painful.
Residential real property is depreciated over a shorter
period of time than non-residential. Is TT interpreting the
correct type of property you are depreciating? If you have
non-residential and TT thinks it is residential, then the
depreciation will be quicker and yearly depreciation amounts
will be higher.
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by aemeijers on March 31, 2007, 10:14 pm
Please log in for more thread options Thanks, Brownie, Bono. No, that wasn't it- I had the right
data input, and was specifying the class of property
correctly. I was wondering about if they used some
alternative formula rather than the tables of what
percentages per year. One of the instruction pages mentioned
that as an alternative, but I didn't understand it.
Anyway, it turned out to be none of that, but rather my own
lack of education, and the badly written IRS instructions
and guide books. How is someone who has never taken an
accounting course supposed to know that 'straight line'
depreciation means you multiply the factor by the <original>
value each year, not the running depreciated value? Silly
me. Once I drilled around in TT enough to figure out how to
dump a table of the calculations, and saw the same
subtracted amount each year, the light bulb went off. My
13-year-old spreadsheet was accurate, just structured on an
incorrect assumption. Would it have killed IRS to put an
example table in the instructions for form 4652? I'm far
from a math idiot- made it through college calc, and do cost
studies at work all the time. This is simply a concept that
civilians almost never have to deal with out in the real
world.
So, my federal taxes since 1993 are inaccurate. Since I
overpaid, not underpaid, I assume they won't be coming after
me? I do understand that when I sell the place, even if I am
not at the end of the depreciation schedule, I need to add
back the allowable depreciation (iow, what I SHOULD have
claimed), not what I did claim, when I figure out the
capital gains thing.
I guess I could file an amended for the most recent three
years, but given that it would be unlikely to make a lot of
difference in the total tax obligation, it probably isn't
worth the hassle. (The rental house in question is closer to
a shack than a castle.)
aem sends, poorer but wiser....
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by LoTax on March 31, 2007, 10:14 pm
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> Anybody out there familiar with how TurboTax calculates
> rental property depreciation? I splurged this year, and
> bought software instead of struggling through it by hand.
> However, when it got to the part about the depreciation
> allowance for the original purchase, as well as the seperate
> deprecation schedule for the addition and remodeling, TT
> claimed the allowances I claimed in previous years totaled
> several thousand dollars less than they should have. I went
> back and checked my math, and the percentages that form 4562
> and publication 946 say to use, and can't find where I made
> any error. Even if I override and correct TT's assumed
> number for previous years' totals, it figures this year the
> way it wants to, to 'catch me up', apparently.
>
> In a quandry here- do I keep on using the spreadsheet of
> figures I have been using, or accept what the software
> offers? If I get audited, can I blame the software?
>
> Any advice greatly appreciated- so far this software hasn't
> made things any less painful.
I am absolutely sure that if you give us the numbers that
you're using and the calculation that you're making and the
percentage that your software is using and the date that the
property was placed in service we will be able to
*completely* analyze and probably locate and explain the
difference between your result and the software's result.
"Why is my answer different from the software's answer" is
really tough question to answer!
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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