How long can you depreciate a residential property if converted it to residential use for some years

[Ivy GSG]

Hi community,

Client has a single-family residential property that has been rented for 4 years. In 2022, client took it back and converted to primary residential property and planned to live in there for some time. 

Suppose that client would live in the house for 3 years and rented it out again afterwards. Would this 3-year personal use time be included in 27.5-year SL depreciation time? Thank you very much!

[TaxGuyBill]

The 27.5 years starts again, using the lower of (a) the Adjusted Basis and (b) the FMV.

And manually keep track of the prior depreciation for whenever it sells.

[Ivy GSG]

Thank you!

To delete deprecation expenses regarding the rental property for 2022 I found two ways to do it in Lacerte. One is to override current depreciation/amortization (screen 22) by inputting -1; the other is to input 1=delete this year in Additional Information (scroll down screen 22).

Do you know the difference between these two methods?

[TaxGuyBill · Accepted solution]

Sorry, I'm a ProSeries user, not a Lacerte user.  But maybe a Lacerte user will come along and answer that for you.

[Ivy GSG]

Thank you anyway!

[sjrcpa]

Delete this year will delete the asset. It won't rollover to next year.

-1 will give it -0- depreciation this year but leave it in the software.

[Ivy GSG]

Well explained. Thank you!

[George4Tacks]

The override current depreciation would allow the assets to proforma to next year. 

The delete this year will delete this year. No proforma to next year,

[Ivy GSG]

Lol thank you! Wish you the same.😄