Discussion:Schedule E - depreciation methods
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Discussion Forum Index --> Advanced Tax Questions --> Schedule E - depreciation methods
Discussion Forum Index --> Tax Questions --> Schedule E - depreciation methods
| 8 April 2008 | |
| I'm doing a return for a new client. Their previous preparer depreciated a rental property @ 27.5/SL/HY. The property was placed in service 5/1/99. Everything I've read and what proseries - Basic is doing, it should be SL/MM w/27.5. I've never had this happen before and wonder how to correct this issue, or was the prior guy correct? Any assitance would help. | |
| 8 April 2008 | |
| I'm going to assume this qualifies for Residential Rental Property. But it appears in 1999 tax prep used the wrong convention. He should have used Mid Month convention. Continue to take 3.636% (1/27.5) of the property basis each year until year of disposition. Record disposition using MM. Unfortunately, you cannot amend 1999. So in the year of disposition, you have to adjust the basis as if the MM convention was taken to figure gain/loss. I do believe that would also give you less depreciation to recapture. | |
Taxstudent (talk|edits) said: | 8 April 2008 |
| You could file a Form 3115 to fix the problem, but, even I, a proponent of frequent 3115 filing, wouldn't see the point here. | |
| 9 April 2008 | |
| Are you sure it was depreciated properly. Could that just be the code listed on the schedule?
See if last years depreciation was actually the proper amount and that should tell you. | |
| 9 April 2008 | |
| No matter how you slice it, it's depreciated for 330 months, s/l. | |
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