Vacation home loss and depreciation

[Just-Lisa-Now-]

Vacation home depreciation....I only have one other client with a vacation home rental and it always turns a profit, so Ive never had an issue with this.

How does depreciation work when the property runs a loss, Im reading that depreciation is disallowed, and it should be carried forward, I see it way down low on the Sch E worksheet as a carryover, but does it appear on the actual tax forms anywhere? If this had been a new clients prior year return where would I find it to carry it forward?  Im not seeing it on Sch E page 2 or the 8582 or carryover worksheet.

[rbynaker]

My ProSeries is pretty rusty but I think it carries this in the software correctly.  Since it's a 280A limitation it doesn't get to the lower tiers for PAL limitations, etc. and you just have to track it outside of tax forms.  Put a note in the file and see if it carries forward to next year (I'm pretty sure it does in PS).

[TaxGuyBill]

When you say "Vacation Home", you mean it is used for BOTH rental and personal-use, right?

If so, then as Rick says, ProSeries does an okay job with the carryover (only okay, because if it is allowing some of the loss, the program may be wrong if they are not Itemizing).

On the Schedule E worksheet, way down with the million boxes of random information, somewhere is the "Vacation Home" carryover.  But it is only on the Schedule E Worksheet - it does NOT show up on the actual tax return.

[TaxGuyBill]

---

@rbynaker wrote:

My ProSeries is pretty rusty but I think it carries this in the software correctly. 

---

I'm impressed at how well you still answer ProSeries software questions.  😀

[Just-Lisa-Now-]

"But it is only on the Schedule E Worksheet - it does NOT show up on the actual tax return."

Yes they had 43 days personal use and 323 rental, its a Hawaii rental with crazy fees they pay, like 61% of the income goes to the management place for all the fees and taxes and junk they get charged....so with mort int, real estate taxes, insurance and depreciation, they end up in the hole, I saw all the depreciation was disallowed and carried but I just couldnt see where that can be followed from year to year just looking at the actual return.....looks like our worksheets keep track of it, but if they went to another preparer, they wouldnt see it anywhere.

[Skylane]

@Just-Lisa-Now-  said but if they went to another preparer, they wouldnt see it anywhere

…. then the new preparer would have to contact the old preparer… 

i don’t provide client with depreciation reports or worksheets unless requested. If the information is not included when i take on a new client, I ask for it. 

[Just-Lisa-Now-]

---

@Skylane wrote:

@Just-Lisa-Now-  said but if they went to another preparer, they wouldnt see it anywhere

…. then the new preparer would have to contact the old preparer… 

i don’t provide client with depreciation reports or worksheets unless requested. If the information is not included when i take on a new client, I ask for it. 

---

 I always include the depreciation reports, but not many worksheets, and the depreciation report doesnt show anything on it about it being carried forward....its a non-issue for me right now, I was just curious if I was missing something or not.