Yes, consider your change of primary residence to Pennsylvania from Virginia a conversion because you are no longer renting the property.
PA Home. Update your Property Profile to tell TurboTax that you converted the property from a rental to personal use in 2020. This stops depreciation on the property. If you sell the PA home in the future, you will subtract any depreciation claimed from the cost of the property. If you begin renting again on either a full-time or part-time basis, the depreciation “clock” will start ticking again.
In TurboTax Online, (1) Edit Rental property info, edit Situations, and click the tile Converted home to rental or rental to home.
In TurboTax Desktop/CD, (1) Start or Update Property Profile, (2) go to the screen Do Any of These Situations Apply to This Property? (3) Check I converted this property from a rental to personal use in 2020.
VA Home. The IRS allows you to claim mortgage interest, private mortgage insurance and property taxes on two homes, so enter a full year of those expenses (if applicable) from the Virginia home in Deductions & Credits. For PA, see the next section.
Rental Income and Expenses. Apportion your rental income and expenses on the PA home. You were part-year residents of Virginia and Pennsylvania. However, because you moved into your PA home in July when you stopped renting it, there should not be any PA rental income. Only VA rental income.
You can claim a half year’s mortgage interest, property taxes and private mortgage insurance as a rental expense. Enter the other half of mortgage interest, property tax and private mortgage insurance in Deductions & Credits (remember you get to claim two personal residences).
Credit for Taxes Paid to Other States. You will only have a credit for taxes paid to other states on your VA state return. There is no credit on the PA return because you did not rent the VA home so there is no VA income or state income tax for the time you were PA residents.
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