How to add rental property depreciation in TurboTax 2015?

How to add rental property depreciation in TurboTax 2015?

To add rental property depreciation in TurboTax 2015, follow these steps:
1. Log in to your TurboTax account.
2. Click on the Federal Taxes tab.
3. Select the Wages & Income tab.
4. Under the Rental Properties and Royalties section, click on Start next to Rental Income and Expenses.
5. Follow the prompts to enter your rental property details.
6. When you get to the section on depreciation, enter the relevant information such as the cost of the property, date placed in service, and the method of depreciation.
7. TurboTax will then calculate the depreciation for you based on the information provided.

Adding rental property depreciation in TurboTax 2015 is important as it allows you to deduct the depreciation expense from your rental income, reducing your taxable income and potentially lowering your tax liability.

FAQs:

1. Can I deduct rental property depreciation on my taxes?

Yes, you can deduct rental property depreciation on your taxes as long as the property meets the requirements for depreciation.

2. How do I calculate rental property depreciation?

Rental property depreciation is typically calculated using the cost of the property, the recovery period, and the depreciation method chosen.

3. What is the recovery period for rental property depreciation?

The recovery period for rental property depreciation is usually 27.5 years for residential rental properties and 39 years for commercial rental properties.

4. What is the depreciation method for rental property?

The most common depreciation method for rental property is the Modified Accelerated Cost Recovery System (MACRS).

5. How does rental property depreciation affect my taxes?

Rental property depreciation helps lower your taxable income, thereby reducing your tax liability and potentially increasing your tax refund.

6. Can I claim rental property depreciation if my property is not rented out?

No, you can only claim rental property depreciation if the property is being used for rental purposes and generating rental income.

7. Do I have to recapture depreciation when selling a rental property?

Yes, when you sell a rental property, you may have to recapture some or all of the depreciation claimed over the years as ordinary income.

8. Can I claim rental property depreciation if I use the property for personal use as well?

Yes, you can still claim rental property depreciation even if you use the property for personal use, as long as it is predominantly used for rental purposes.

9. How does rental property depreciation differ from regular property depreciation?

Rental property depreciation is specifically for properties used for rental purposes and is subject to different rules and recovery periods compared to regular property depreciation.

10. Can I claim rental property depreciation if I use it as a vacation home?

If you rent out your vacation home for part of the year and use it personally for the rest, you may be able to claim rental property depreciation for the time it is rented out.

11. Do I have to claim rental property depreciation every year?

You are not required to claim rental property depreciation every year, but it is recommended to do so to take advantage of the tax benefits it offers.

12. Can I amend my tax return to add rental property depreciation if I forgot to do so initially?

Yes, you can file an amended tax return to add rental property depreciation if you forgot to claim it on your original tax return, but there may be penalties for late filing.

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