Depreciation of Vacation Home

[DBnr]

New Client  - rented out vacation home for 60 days last year.  When I enter it for depreciation it is $4k less than the depreciation from last year?.  

[abctax55]

Is your amount correct?

Maybe the prior preparer made a mistake.

[DBnr]

Triple checked amount of asset - just wondering since last year was the first year for rental if there was special depreciation for that?   No depreciation report in copy of tax return

[sjrcpa]

How did you get your basis amount?

[DBnr]

Client provided

[TaxGuyBill]

What about percentages?  If the rental percentage was much lower this year, that could account for a much lower amount of depreciation.

It is also possible the prior year is wrong, such as depreciating 100% when it was less than that, or incorrectly including land as part of the depreciable Basis.

[DBnr]

Thanks Bill - actually rented it out 5 days more this year ;{

Do you generally provide your client with the Depreciation schedules when you print their hardcopy?

[sjrcpa]

Is only the building being depreciated?

Or is there personal property for which bonus depreciation was claimed last year?

[sjrcpa]

If last year was the first year for the rental there should be a 4562 in the return.

[DBnr]

No Neither

[TaxGuyBill]

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@DBnr wrote:

Thanks Bill - actually rented it out 5 days more this year ;{

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Was there personal use?  If so, five more rental days doesn't directly matter, the business percentage does.  Was this year a much lower business percentage than last year?

If there was personal use, how many personal days this year? 

When you are looking at the depreciation for this year, are you looking at the Asset Entry Worksheet?  Or the Schedule E Worksheet?  Or are you looking at the actual Schedule E itself?

[George4Tacks]

What do you get if you depreciate the land? 

[abctax55]

All most ALL of 'us' provide the depreciation schedules with the client copy.

Except Laura (who hasn't posted in ages....).  She was "adamant" that the depreciation schedules were her work product and refused to give them to clients.  This, despite many posters pointing out that wasn't the case.  

Even if she was right.... IMHO life is too short to screw up the lives of former clients.

[Accountant-Man]

For real estate, the placed in service date uses the "mid-month" convention for depreciation in the first year, so a July 1 start date would have 5 1/2 months worth of straight line depr.

Second yar would be 12 months worse.

[DBnr]

I did not prepare the return last year so I can't compare business percentage to last year.  The depreciation expense reported last year is $5300 more than what is showing for this year.  No depreciation schedules were provided to client.  

[abctax55]

I repeat:

Is your amount correct?

Maybe the prior preparer made a mistake.

[DBnr]

Yes it is correct.  I know it's straight-line.  I have no idea what else they would have depreciated as the client indicates they did not have any other things to depreciate and certainly nothing that they told to prior preparer, who btw, never provided depreciation schedules.  LOL