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Skip a year of depreciation?

I have a client whose Schedule E wasn't operating for a year.  (The building was inhabited rent-free by a family member for part of the year, unrentable for the rest.  No attempt was made to get a paying tenant.)  Since the business was on hiatus for that year, we can't claim any expenses, including depreciation.

Is there any way to make Lacerte skip a year for depreciation, then pick up where it left off?

I've played with this a little using a sample client and an imaginary 3-year asset.  In the second year I tried entering -1 for current depreciation, and -1 for business percent, and proforma'd each method for a couple of years.  Either way, Lacerte treats year 3 as the final year, taking partial depreciation.  Year 4 has $0 depreciation, as though it were fully depreciated, even though there's a year's worth of basis remaining.  

Entering the asset in year 2 as if for the first time, changing Prior Depreciation to match actual (a year's-worth lower than normal) doesn't solve the problem.

Manually adding a year to the Life doesn't solve the problem, and messes up the dollar amounts.

I'm hoping there's a trick that takes care of the whole thing quickly, similar to skipping a year for claiming a dependent, but that's probably wishful thinking.

The only solution I see is to attach notes instructing the preparer to override the depreciation in each of these assets' next-to-last and last years  (and hope the notes aren't garbled or lost over the next several years).
Any other suggestions are very welcome!
  • Accountant Man-  That sounds like it could be a better solution than mine, but still more complicated than I'd like.  The problem is that I don't want to start the depreciation over, since that would give the client a lower usable expense over a longer period.

    If I delete the Sch E, the assets go with it.  I would re-create the Sch E the following year, and re-enter all of the assets as though acquired 01/01/13.
      Any with SL depreciation:  I would use the adjusted basis, SL (method code 91), and change the Life to the number of years remaining (decimals where necessary for partial  years).
      Any with 200DB:  I would use the actual basis, enter the prior depreciation, 22% declining balance (code 92), and enter the original Life.
    After testing with some sample clients, this gives me the correct numbers.

    That method would get everything entered next year, so I don't have to worry about the info being lost, but it's still awkward.  I'm hoping there's a trick to this....
  • You don't start over. Just re-enter then in 2014(or whatever) using all of the original data and accumulated depreciation. There will be no accumulation during the year the property was not a rental.
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I change the depreciation method to 99 (land) and don't touch anything else.  No depreciation calculated for the year(s) when 99 is in play.  Then I have to remember to change to the actual method when it is time to start depreciating again; but my basis and prior depreciation are still there. And I learned this from someone else on the forum.
  • Does this move the final depreciation year back?  I'm not worried about getting the depreciation expense off the current return, it's getting it to depreciate correctly in following years.
  • I don't think Susan's method does, but try the one I suggested.  It should, as the software will be working on the DDB method, not the IRS tables method.
  • Sorry abby, I forgot about the useful life part of your question.  I always use formula instead of table like Anna (abc) does, too.
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Or you can print out the deprecation schedule and keep it handy for the future, then delete the Sch E.
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    >>>Entering the asset in year 2 as if for the first time, changing Prior Depreciation to match actual (a year's-worth lower than normal) doesn't solve the problem.<<<


    @Abby,
    What happens when you try that?  I was going to suggest it until I re-read your question more carefully.  I could swear I've done this before, years ago, and it worked fine (in ProSeries, though, not Lacerte).  But I can't remember which client it was, or which year.  Possibly the Lacerte depreciation module has been "enhanced" to the point that this no longer works.
    • It works fine, until what would have been the next-to-last year if it had been depreciating all along.  Lacerte treats that as the last year -- meaning, if it's a half-year method asset, it only allows half of what would have been its depreciation for that year.  It *should* be showing a normal full-year depreciation.  In the following year (what should be the new final year) it shows $0 depreciation.
    • Yep, should have thought of that.  Shoulda, woulda, coulda.
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    No time at this minute to look it up, but I believe the final year stays the same as it was when originally set up. I would take it out of service for the year in question and then adjust in the following year by entering the original basis and life. Then adjust the depreciation allowed so there is no depreciation allowed or allowable for the year it was not in service. You will probably have to do some overrides. EDIT: This way the property retains a year of depreciation as its basis.
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