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derekchha
New Member

With a new rental property co-owned with wife, do I add 50% or 100% of purchase price to UCC additions on my return?

I bought a rental with wife last year with my wife and we own it 50/50.  I recorded it as "co-ownership" on last year's tax return and added 50% of purchase price to UCC on my tax return, not 100%. 

The revenue and costs seem to be split properly automatically by Turbotax.  However, when I reviewed the CCA calculation, it looks wrong.  It looks like Turbotax is calculating the CCA based on the 50% purchase price I entered into UCC, and then taking half of that amount (I believe I'm effectively only getting 25% of the total CCA on the property instead of 50%)

Should I have entered 100% of the purchase price into UCC additions last year to ensure Turbotax appropriately calculates CCA?  The additional wrinkle is that I have another rental property that is only under my name and it seems like the net income on that property influences how CCA is deducted on the jointly owned property.  Specifically, the amount of CCA deducted on the joint property seems to be different on my return vs hers.

4 Replies
TurboTaxTatsiana1
New Member

With a new rental property co-owned with wife, do I add 50% or 100% of purchase price to UCC additions on my return?

You have entered correctly 50% on your side. You also should enter 50% ( duplicate same entries) under your wife's rental property records.This will account for 100% of purchase. 

The reason you see only 25 % on your return is due to the Half Year rule : you are entitled to only half of depreciation  deduction in the year of additions, because you have not owned asses for the full year. Next year you will see a full deduction. 

derekchha
New Member

With a new rental property co-owned with wife, do I add 50% or 100% of purchase price to UCC additions on my return?

Thanks but I should clarify that I purchased the property in 2016, so the half year rule would have been applied on my 2016 tax return.

On the 2017 return, it still seems like CCA in Area A of the T776 is calculated on the UCC I entered (ie. 50% of purchase price) and then only half of that amount is included on row 9936 to reflect what TurboTax considers to be my 50%.  Obviously, TurboTax doesn't realize that I've already done the 50% allocation already in the starting UCC.

Do you have any suggestions on how to fix this?  I hope I don't need to manually adjust this every year, otherwise it'll be immensely painful.
TurboTaxTatsiana1
New Member

With a new rental property co-owned with wife, do I add 50% or 100% of purchase price to UCC additions on my return?

The other reason you may see limited CCA claim is because you are not allowed to create or increase loss by CCA claim. Therefore Turbo tax will calculate min amount of CCA needed to take your rental income to 0 and will claim only  that not  waste your deductions. Please check if the claim amount calculated by TTO reduces your net income from rental operation to zero.
derekchha
New Member

With a new rental property co-owned with wife, do I add 50% or 100% of purchase price to UCC additions on my return?

I'll double check tonight, but I recall I had lots of net income room to use more CCA deductions.

If there is net income room, do you have any other suggestions?
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