No Schedule E was filed for 2021. Maybe that was a mistake
Yes. That was a boo-boo. But fairly easy to recover from without having to amend to show a conversion to personal use.
Basically, you will show the property "in service" in 2022 with an in service date of whatever day a renter "could" have moved in. Depreciation will start over from year 1, using a newly established cost basis that takes into account depreciation you have already taken. So the new cost basis on the structure will be lower. The cost basis of the land will be exactly the same, since land can not be depreciated.
First, you need to establish a new, adjusted cost basis for the structure and any other depreciable assets, to be used for depreciation on the 2022 tax return. To do that, you need the two Form 4562's from your 2020 return. (They don't exist on your 2021 return, since you say the property was deleted that year.)
The two 4562's you need are not "official" IRS forms. But thy're in the PDF of your 2020 tax return. Both print in landscape format. One is titled "Amortization and Depreciation Report" and is the one you will most likely need. The other is titled "Alternative Minimum Tax Depreciation" and it will be needed only if the program asks you for any AMT numbers.
First, determine your new cost basis on the structure. Note that the cost basis of the land will not change, since land is never depreciated.
On the 2021 form 4562, "Depreciation and Amortization Report" look at the asset for the property itself. Now add together the amounts in the "prior year depr" column and the "current year depr" column and write that total down. This is the total amount of depreciation taken on that asset thus far. You have to reduce the cost basis of the structure (not the land) by that amount.
Subtract that total from the amount in the "cost basis (net of land)" column to get your new cost basis for the structure and write that total down.
Now add your new cost basis for the structure to the amount in the "Land" column to get your new total cost basis for the property that you will enter into TurboTax 2022. You'll enter that amount in the COST box, and the amount shown in the "Land" column will be what you will enter for "Cost of Land".
The same process works for any other assets you may have listed on the form 4562 from the 2020 return.
Now, if you have anything entered under a heading of "Amortization", that gets handled in a completely different manner. I'll assume you know that, and stop here.
