rental house depreciation question

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.

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.

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!

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 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....

Look at form 3115, which allows you to change accounting systems, and you may be able to claim all that lost depreciation this year instead of amending previous years.