Need help on 50% depreciation calculation on Schedule E
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I use ProSeries Basic this year. The client has 50% ownership on a rental property. I choose to click "M" line on Sch E - Check to Allociate Income & Expense using Ownership Percentage and Click "N" and enter 50% on Enter Ownership Percentage space.All income and expenses I entered on column "a" are automatically calculated and transfer half of the amount to column "c" Reported on Schedule E.The depreciation on column "a" however transfer the whole amount to column "c".Do I need to enter only half of the cost of the asset in Asset Entry Worksheet so that my cleint can claim the whole amount of depreciation shown on column "c"?The way my client's previous tax preparer did was to enter 100% of Income and Expenses on Schedule E, including 100% of the cost of an asset, then on line 22 of Sch E, she used the total expenses from line 21 x 0.5000. I don't know which tax program the preparer used and how I can try the same way to show the total income on line 21 and times 0.5000.Any input will be appreciated!
Answer
I would think that since your client is a 50% owner, that you would enter 50% of the the total basis on the asset entry worksheet.
Answer
It might be easier to take the rental property information and split everything up 50/50 and then on each individual owner';s share as 100% on their respective tax returns. The % ownership boxes on the Sch E worksheet I thought had more to do with the rental % when the taxpayer owned the entire building and used a portion as a residence as in a double.
