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Is there a way to note on Schedule E (or box to check in ProConnect) that a rental property was converted to primary residence in the current year?

 
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George4Tacks
Level 15

No. Enter the date of conversion as the date of sale of the assets attached to the Schedule E, but DO NOT enter a sales price. That will retire the assets. 
Schedule E and any passive losses will carry to next year.  You can then delete the Schedule E and figure out how to carry over the passive losses. I believe you need to just write yourself a note to remember to claim them when the property converts back to rental or is sold. 


Answers are easy. Questions are hard!

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3 Comments 3
George4Tacks
Level 15

No. Enter the date of conversion as the date of sale of the assets attached to the Schedule E, but DO NOT enter a sales price. That will retire the assets. 
Schedule E and any passive losses will carry to next year.  You can then delete the Schedule E and figure out how to carry over the passive losses. I believe you need to just write yourself a note to remember to claim them when the property converts back to rental or is sold. 


Answers are easy. Questions are hard!
sjrcpa
Level 15

Technically, you're supposed to show them on the 8582 each year. But that means leaving the former rental property in the software.

The more I know, the more I don't know.

Thank you for your guidance.