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Converting a rental property to personal use in ProSeries
by Intuit• Updated 4 months ago
In the current year return:
- Open the Schedule E Worksheet.
- Enter your final year income and expenses.
- Leave the Complete Taxable Disposition checkbox blank. This type of transaction is not a taxable disposition.
- Open the Asset Entry Worksheet(s) for the rental home property.
- Scroll down to the Dispositions section.
- Enter the Date of Disposition which is the date the rental stopped being a rental property.
- Don't enter sales information. Even a zero for sales price will cause Form 4797 to calculate.
In the next year return:
With this type of disposition ProSeries won't know that the Schedule E Worksheet for the rental is no longer needed. We'll need to remove it in the following tax year:
- Open the Schedule E Worksheet.
- From the Forms menu, select Remove Schedule E Worksheet.
- You'll be asked to make sure you wish remove the Schedule E Worksheet. Select Yes.
These steps will help with any non-taxable disposition, such as:
- Like-kind exchanges.
- Conversion to personal use.
- Transfer to a corporation or partnership.
- Transfer due to divorce (treated as gift-IRC 469(j)(6) & 1041(b).
- Installment sale where passive activity limitations are triggered in ratio to gain reported.
- Bankruptcy.