Greetings all,
I know it is the day before taxes are due, but I have been reading and searching for an answer to my problem for about a week. I just cannot find one.
Our problem focuses on Depreciation of a Rental Property. I am using "FreeTaxUSA" to do our taxes this year (first time using it) and when I get to the depreciation section, the result is "Your 2015 depreciation deduction for your condo is $0." It does not indicate that we can claim any depreciation on our rental condo.
Are there any circumstances where depreciation on a rental property cannot be taken?
Here are our stats:
Rental condo in service: 01/01/2010 FMV at time of service: $369,000 Land: $238,000 (I used the 2015 tax assessors to get the current land percent and applied that to the $369,000 value above) Calculated improvements: $131,000 (simply $369K - $238K)
0% used for business, but I consider myself an "Active" participant (I make the decisions, get the rent, approve repairs, etc) Based on S-L, mid-month. At 27.5 Years, I calculate that I should be depreciating $4,764. However, the tax software tells me I depreciate $0.Married, filed jointly with 1 dependent.
MAGI of $131,692. I know there is a sliding scale between $100K and $150K. With the 50% calculation, we still have $9,154 available for deductions ($150K - $131,692 = $18,308. $18,308/2 = $9,154).
Total Rental income for 2015 is: $21,900 Total Rental Expenses for 2015 (depreciation not included) is: $25,921 Total Rental Income for 2015 (without calculating depreciation) : -$4,021
We are itemizing deductions right now at $18,725.
Other than the rental, our taxes are fairly basic and straight forward. I just do not know why FreeTaxUSA says that my 2015 depreciation deduction is $0 (zero.)
Any help or advice is great appreciated.
Thanks!