- Bought condo 1998 for rental and rented until 2016.
- Converted to primary residence in 2016 and sold in 2022. 100% business use until it was 100% primary residence, no partial.
- The structure and some appliances were depreciated during rental, no 179 or special.
- Suspended passive activity losses that I need to deduct now.
I am told by one expert that in 2022 what I sold was a primary residence and thus I should complete the Sale of Main Home Worksheet to determine 121 exclusion, Form 8949 and Schedule D with Unrecaptured Section 1250 Gain Worksheet. No Form 4797 because I sold the property as a primary residence, not a rental property. Cannot reactivate Schedule E because the property is no longer a rental.
I am told in another response that I must file Form 4797 because I had past rental use and that I should file a Schedule E for the first time in 6 years, put zero days of rental and show the PALs there, carrying to Schedule 1. Also, the Sale of Main Home Worksheet to determine 121 exclusion, Form 8949 and Schedule D with Unrecaptured Section 1250 Gain Worksheet.
The only thing I can find on IRS.gov is in "Publication 523 (2022), Selling Your Home" which says "If you made separate gain/loss calculations for business and residence portions of your property, you MAY have to use Form 4797 to report the sale of the business or rental part." Since I NEVER had a portion of the home or property used for business while another portion was used for personal, I did not make separate calculations.
!! Nov. 16 is my deadline for filing and paying and I need to know what forms I should file to show this sale. Please help and please make sure to explain why the method is right. Thanks.
