Why is my depreciation percent not following the MACRS 27.5 SL method?

nylandlord
nylandlord Member Posts: 1 Newcomer
in Filing my taxes

I have a rental property for which I file a Schedule E. I depreciate the property (not including land value) and any improvements I make to the property. All assets are depreciated using the 27.5yr SL method with Mid-Month conventions.

None of the assets were placed into service in the current year, nor were they in their last year of service.

Shouldn't the Depreciation % computed by FreeTaxUSA for these assets be 3.636%?

I am getting values ranging from 3.7915% to 3.8277%. Why would the depreciation percent be different from 3.636% per year?

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  • rachels
    rachels FreeTaxUSA Agent Posts: 95

    Hi nylandlord,

    Depreciation, even when using the straight-line method can be pretty complicated. For residential real estate, you'll generally use table A-6 in IRS publication 946. If the business use percentage changes from year-to-year, it can affect the depreciation percentage for each year. The amount of prior year depreciation taken on an asset affects the current-year depreciation amounts.

    In other words, there are a lot of things in-play with this. We do guarantee our calculations, based on the information entered in your account. If you have additional questions about the specific depreciation on your return, please log into your FreeTaxUSA account and contact our customer support team.

    You can find a link specifically discussing how depreciation is figured here.

    For more general information about depreciation, please see this Community article.

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