That is what I selected and it is creating a 8825 and showing the depreciation under ordinary income. Under the forms a Depreciation Report shows and when I open it, it is a 4562.
No section 179. That column shows as Zero on the 4562 form. Depreciation shows on the 8825 on line 14. On 1065 is shows on line 1, Ordinary business income, on pg 4. This causes the generation of the self-employment worksheet which is not correct.
Ok. Thanks for being patient here. We will get to the bottom of this. Where does the rental income and other expenses (besides depreciation) show on the return? It is clear that we are dealing with an issue as to how you have the rental activity classified. The classification of "active" trade or business versus "passive activity" will create ordinary income. Again, can you tell me where the income and other expenses are showing up? I am specifically concerned about what, if anything, is showing on Page 4, Line 2 as Rental Income (Loss).
I am thinking that you probably are going to end up having to completely remove the existing form 4562 that is affecting ordinary income and re-enter the asset/depreciation information through the form 8825 entry screen.