Rental Property turned into primary residence

[brenda4672]

How do I report a rental property that was taken over to be used as primary residence. 

Property was acquired by an inheritance (base 230,000 ) and rented for 5 years and 5 1/2 months.  Owner lost their job and sold their primary home in a different state and moved into the rental property and made it their primary. Depreciation deduction was taken for 5 years on prior tax returns 100% business use. There was technically no sale of the rental property. Due to Covid 19 rent was only collected for 3 months of the year but was occupied by tenants for 5 1/2 months. 

[TaxGuyBill · Accepted solution]

On the Asset Entry Worksheet, go to the disposition area near the bottom.  Enter the date it was converted to personal use, and leave the sales price BLANK.  That will stop the depreciation, and effectively converts it to personal use.

[TaxGuyBill]

Another thing, on the rental worksheet, only enter the rental days.  Do NOT enter any personal days.  That is only if a rental goes back-and-forth between rental and personal use.  Because it was 100% rental and converted to 100% personal, enter ZERO personal days.

[Just-Lisa-Now-]

And keep the depreciation details printout for when it does eventually sell and you need to recapture the depreciation previously taken.

[rbynaker]

And you'll need to manually allocate the expenses between Sch E and Sch A (if applicable).

[brenda4672]

Thanks! Very helpful. Sorry for such late response!

[brenda4672]

Thanks!

[brenda4672]

Thanks! Very helpful!

[neelthakkar]

I am using Pro Series and personally  I don't see the option to enter the date of conversion to personal use in Asset entry work sheet. Is it anyway you can show post a screen shot about it. 

[rbynaker]

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@neelthakkar wrote:

I am using Pro Series and personally  I don't see the option to enter the date of conversion to personal use in Asset entry work sheet. Is it anyway you can show post a screen shot about it. 

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Enter a sale date with no sale price.

[TaxGuyBill]

You enter a "sale"/disposition DATE, but leave the sale price BLANK.