David94
Level 3
‎01-18-2025 01:30 AM

Hi,

I'm seeking clarification on the depreciation of foreign residential rental property. I've encountered a discrepancy between what the program shows and what the help center states.

According to the ProSeries:

  • Federal (using ADS): Both regular tax and AMT use a 30-year recovery period on the program’s asset entry worksheet.
  • California: The program's asset entry worksheet, when using the alternate method, shows a 40-year recovery period for regular tax and a 30-year recovery period for AMT. However, the program's tax help states, "The program sets the AMT recovery period to 40 years for residential rental estate or nonresidential estate."

My questions are:

  1. Which information is correct: what the program displays or what the help center states?
  2. What is the definitive rule for depreciating foreign residential rental property for both federal and California taxes (regular and AMT)?

Thank you in advance for your help!

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Terry53029
Level 15
Level 15
‎01-18-2025 10:23 AM

Since 2018 foreign residential rental was changed from up to 40 years to 30 years for regular and AMT for federal.  Don't know about CA, maybe Lisa will jump in.

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TaxGuyBill
Level 15
‎01-18-2025 01:18 PM

The so-called "help" screens are frequently outdated.

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David94
Level 3
‎01-18-2025 02:23 PM

Thank you for your reply !!!

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David94
Level 3
‎01-18-2025 02:26 PM

Then, does this mean that the recovery period on the worksheet can be accurate?

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TaxGuyBill
Level 15
‎01-19-2025 09:57 AM
@David94 wrote:

 

  • Federal (using ADS): Both regular tax and AMT use a 30-year recovery period on the program’s asset entry worksheet.
  •  
  • California: The program's asset entry worksheet, when using the alternate method, shows a 40-year recovery period for regular tax and a 30-year recovery period for AMT.

 

As Terry said, if it was placed in service after 2007, Federal is correctly at 30 years.

I don't know California rules either.  But 40 years for 'regular' and 30 for AMT does seem rather bizarre.

 

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Terry53029
Level 15
Level 15
‎01-19-2025 11:31 AM

@David94 you will need to research CA yourself, as the numbers you gave for CA seem strange.

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