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Deductions & credits
Per §1.168(i)-4(c) the conversion to personal use is treated as a disposition, but no gain or loss is recognized at that time.
If the property is then later converted back to rental use, it is treated as having been placed in service for the first time on that date (prior depreciation needs to be tracked to determine the new basis for depreciation - the lesser of FMV on the date of conversion or adjusted basis).
December 9, 2020
9:14 AM
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