Not sure how to handle the foreclosure and cancellation of debt for rental that was vacant for over a year.

[bookish29]

I have a complicated situation that I can't seem to find the answers for in IRS publications or articles online.  We had a rental that was formerly my husband's primary residence.  It was converted to a rental 1/1/2015.  Due to multiple lease cancellations and unapproved repairs by the management company, we could no longer make mortgage payments (11/2017.)  We continued to rent it out until 6/2018, when the lender began the foreclosure process and the management company would no longer rent it out.  We advertised on our own, but it remained vacant.  Then our city was hit by Hurricane Michael in 10/2018.  The rental sustained damage making it unlivable.  As the property was still in the foreclosure process, and we were fighting it out with our insurance company, it remained vacant and unrepaired.  The lender finally foreclosed 3/6/2020.  We received a 1099-C for cancellation of debt (it was a recourse loan.)

Beginning in 2015, I reported the rental on Schedule E.  We had losses every year, so we had several years of accumulated passive losses.  When I filed our 2019 taxes (with Turbo Tax Online,)  we had no income and no expenses, so I checked "I did not rent, nor attempt to rent, this property at all in 2019," which deleted the rental.  Therefore, no depreciation was taken for 2019.  But even if we had taken it, it would have been added to our passive loss carryover. 

I am using the Turbo Tax Premier download for 2020.  I thought I had figured out how to report all of this, but now I'm having second thoughts.  Here's what I've done so far:

• I used the canceled debt worksheet to calculate the income from cancellation of debt, and the foreclosure sale. I linked the CODI to Schedule E.  The loss from foreclosure went to 4797.
• Schedule E: I entered 0 rental days and 0 personal days.  CODI is listed as rental income.  I entered mortgage interest from the 1098 received from the lender for 2020.  It is significantly higher than usual, since the 2018 and 2019 1098's were $0.  
• Because I entered 100% business use for 2020, there is depreciation for 2020 (until the date of sale.)
• I entered all prior passive losses, which are now deductible. 
• I have a gain on Sch. E and a loss on Form 4794.

Things I am uncertain about:

1. When I deleted the rental for 2019, in IRS's eyes, did I convert it to personal use? If so, is amending 2019 necessary?
2. Was accidentally converting it to "personal use" actually correct, even though we attempted to rent it out, and then were unable to due to hurricane damage?  If so, how are passive losses and CODI handled? Do I convert it back somehow to have the CODI go to the Sch. E? ? Do I handle the foreclosure sale differently than the way I explained earlier?
3. If I should NOT have converted it to personal use,  does it matter that I did not claim depreciation for 2019 (since it would have been cancelled out by becoming a passive loss)?  Would I use my 2018 prior depreciation and passive losses, or include the 2019 depreciation and passive loss (even though they were never claimed)?  I can amend 2019 if necessary (it would be a Sch. E with $4000 depreciation, which would add $4000 to my passive loss carryover on Form 8582.)  
4. Is it correct to use the total mortgage interest from the 2020 1098 as an expense on Sch. E? Should I use only a percentage? None at all?

I know this is a lot of information and I tried to explain the best I could.  Any advice would be greatly appreciated.

[MaryK4]

Because you did not rent it out in 2019 and file a Schedule E, it does not necessarily mean that you converted it to personal use.  For the 2019 Schedule E, you may want to amend to include the depreciation (in which case you may have to recalculate the 2020 numbers)  Publication 527 (2020), Residential Rental Property says:

Vacant rental property.

If you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses (including depreciation) for managing, conserving, or maintaining the property while the property is vacant. However, you can’t deduct any loss of rental income for the period the property is vacant.

Vacant while listed for sale.

If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. If the property isn’t held out and available for rent while listed for sale, the expenses aren’t deductible rental expenses.

It would be proper to use the interest expense if it was included in the CODI.

[Critter-3]

As much as we would like to do our own returns there are some situations where you should seek professional assistance and this is one of those times.   No DIY filer should attempt filing a return with a 1099-A and 1099-C on a rental property as it is not a DIY situation.  Doing this wrong will cost you much more than a paid tax pro would cost.  Trying to save pennies will cost you big dollars down the road.    So my professional opinion  is you need to  either upgrade to the LIVE version or  seek local professional assistance.