Vacation Home Rental - Depreciation

[JimS_1]

In situations where a vacation home is rented more than 14 days and used more than 14 days or 10% by the owner, Lacerte calculates depreciation and indirect expenses based on the ratio of personal days to total days used (rented + personal).

However, if the vacation home is used less than 14 days, Lacerte does allocate indirect expenses, but does not decrease depreciation for the personal use portion.   Is Lacerte doing this correctly?  

The IRS publications suggest that all expenses should be allocated between personal and rental, whether it's used more or less than 14 days for personal use.

(I'm ignoring interest/taxes and the Bolton decision for this question)

[TaxGuyBill]

It seems wrong to me.

I just checked, and ProSeries prorates it (it changes the business percentage of the asset).

[abctax55]

On D-22, what code are you using for the rental?  It should be code 11 for a vacation rental.

NOT code 3.

[JimS_1]

Yes, I'm using Code 11.  That is how Lacerte knows when it's over 14 days to allocate the depreciation based on the rental percentage.  

I just don't understand why it's not using the rental percentage on the depreciation when the usage is under 14 days.

[jharvey]

You can enter percentage of business use in the depreciation screen.