Thanks for clarifying things a bit better. Your reference to "we" moved into "our" home indicates that it became your primary residence upon your move in. Here's how that affects things.
Technically, this house should probably be converted back to personal use. But since you will be vacating it again in less than a year after occupying it, I really see no need. Besides, once you convert it to personal use, when you convert it back to a rental again, everything starts over with depreciation, using a new cost basis that is determined by subtracting all the depreciation already taken, from the old cost basis. So just leave it classified as a rental and save yourself the drudgery of extra paperwork and math.
- Property improvements will still be applied. But you will not enter/claim those property improvements until the tax year you actually place the asset in service. Since the renovation was completed in 2021 while you were living there, it's never placed "in service" as a rental asset in 2021. So you won't enter it on your 2021 tax return. You'll enter it on your 2022 tax return next year, in the Assets/Depreciation section with an "in service" date that has to be at least one day after you and the family vacate the property. Technically, the in service date will be the first day the property is "available for rent". Typically, that's the day you put the FOR RENT sign in the front yard.
As for the maintenance and repair costs incurred while you are living there, they're just flat out not deductible. As an example, things like yard care, power washing the driveway, replacing that broken door knob and hinge on the back door, yearly maintenance of the central air cost of electric, water, and other utilities are just flat out not deductible in you incurred the expense during the period of time you are living in the property.
Additionally, assuming you will leave the property classified as a rental (which is what I recommend), you will need to indicate that the property was not rented the entire year. Then you'll be asked for days rented, and days of personal use. The total of those two numbers do not have to total 365 (days in the year). The total can be less than 365. But it can't be more. The days the property may have sat empty before you moved in, don't count against you. But the days you lived in the property do count against you for depreciation. So your depreciation for 2021 will be quite a bit lower than it was in 2020.
