When I looked at TTax for the Land Asset, Special Handling, "Convert to 100% Personal Use", the "Learn more" box says "If during the time you used the asset for business your percentage of business use was less than 100%, you will have two sales to report".
Well, you are "in fact" reporting two separate sales. You sold the structure in 2022, and will be selling the land in 2023.
Is this going to apply to my situation of selling non-depreciable land in 2023? Or is my situation specific enough that this is not applicable. As a converted asset I presume next year it will be reported in the Investment Income section.
Either way, the sale will be reported on your 2023 tax return in the investments section. The important thing here, is that you will need the cost basis of the land when you report the sale on the 2023 tax return. If you just convert the land to personal use, make absolutely certain you print out the 4562's that print in landscape format. Those 4562's will have the original cost basis information on them, which you'll need for the 2023 taxes. Basically, you'll be adding your demolition cost and any other unclaimed depreciation on other assets that were lost in the casualty, to that cost basis for the land when you report the sale in the investments section.
If after converting to personal use, the SCH E data is imported for that property on the 2023 return, you can just delete it from the 2023 return since you'll be reporting the land sale in the investments section. anyway.
If I have to report it twice then it seems like converting it has no advantage, or am I missing something?
