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My client claimed home office in the past year and then turned home to rental in 2025. The property is already entered for Depreciation for Home office use. How to link that property to Rental on Sch E in 2025?
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Screen 22.
Change the Form number from "10" to "3".
AND change the method to "85" from "87".
Depending on your choices in 'Set Up', you may need to use/check the box to tell the program to use *IRS* tables instead of *DDB*. DDB works off of the accumulated depreciation, and adjusts the current year depreciation based on percentages.
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Thank you so much for your advice. Then what happens to the prior unallowed deductions? Will the deductions still be available for the future even when the property is no longer used for home office?
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You can keep track of them. They can only be used IF that same home/office in home is again used for business. They can't be used against the Sch E rental income.
