What to do with Schedule E from last return?

[Brae09]

In our 2017 return, we reported rental income. In 2018, we had no rental income. In the 2018 return, TurboTax lists the entry "Rental Properties and Royalties (Sch E)" on the "Income & Expenses" page, nothing under the 2017 column and a negative dollar amount under the 2018 column. We stopped renting this property in 2017 and sold it early 2018. What should I do with this Schedule E that TurboTax appears to be adding to our 2018 return? Thank you for your help.

[Coleen3 · Accepted solution]

You need to indicate several things in the Rental program. The first is that you sold the property. There are two entry points below in the screenshots.

The next is to say that there was no rental use in 2018. See the third screen shot.

[Brae09]

Thank you so much for the quick and helpful answer. In the first screenshot, under Converted, should I check the second one "converted from rental to personal in 2018"? We stopped renting in mid 2017 and used it for personal purposes until selling it in early 2018. I don't know if I marked this checkbox in my 2017 return or not. Should I have? Where in the 2017 return would tell me if I did or not?

[Coleen3]

Yes, if it was converted in 2017, you should have checked the box on your 2017 return. You should not have gotten a full year of expenses, depreciation, etc. if it was converted to personal property. You won't see it on the actual Sch E. You could judge is you saw a full year of expenses.

[Brae09]

Looking at 2017's return, I didn't take the full year of expenses and depreciation. In the current year, on your third screenshot, I checked the last box "I did not rent this property at all in 2018." Then TurboTax prompted the following:

"Since this property was not a rental at all in 2018, you should delete it as a rental. Make sure to keep your complete return, including the Depreciation Report for this property, from 2017 (or the last year this property was used as a rental). You'll need that information when you sell the property or convert it back to a rental."

So it looks like I should delete this rental and work on the sale of the home in the "Sale of Home" section. Does this sound right?