Get your taxes done using TurboTax

Yes, you can do that and you can follows the steps below to place the asset from 2022 out of service and then add your entire home as an asset for your rental property placed in service in 2024.  You can still claim depreciation for 2024 on the first asset if the 2 rooms was in use or available for use in 2024. 

Key Point: You must manually track the depreciation you used from your 2022-2024 tax returns for the original rental activity. You will need it when you sell later, possibly years down the road. There is no carryover to the new assets. 

For all assets related to the home when using 2 rooms for rental:

1. First use the Search (upper right) > Type rentals > Press enter > Click on the Jump to... link
2. Or Wages & Income > Rental Properties and Royalties > Update > Continue to Rental and Royalty Summary > Edit the property
3. Scroll to Assets/Depreciation  > Click Update > Select 'Edit' next to each asset
4. Edit beside each asset > Continue to the Tell Us About This Rental Asset
5. Select the checkbox beside 'This item was sold, retired, stolen, destroyed, disposed of, converted to personal use .... etc. > 
6. Enter the date it was retired or converted to personal use
7. Continue to the screen 'Confirm Your Prior Depreciation'  
   • The amount displayed is only for prior years and does not include the current year. 
   • Continue until you see the current year amount displayed and make a note to add the two amounts together
8. Answer 'Yes' to Special Handling. This should remove it from next year's return during import.

Once this is completed you can enter the entire home as a new asset with a date placed in service for rental use after you moved out. When it was available and marketed as such is the key date even if you did not yet have a tenant.  TurboTax will calculate the depreciation for the current year on both assets, one ending and the one beginning. It will not be duplicated.

The newly entered asset for 2024 Cost Basis: Include the original purchase price, purchase expenses and all capital improvements (your roof) as the cost basis for the house asset. Be sure to separate the land portion, enter the full amount and then land where asked. TurboTax will do the subtraction before calculating depreciation. You can use the tax assessments from the city or county to arrive at the percentage of cost that belongs to the land.