Deductions & credits

It depends on how you entered the Rental Property in TurboTax. You may be able to simply change the ownership percentage in two areas of the rental activity. Note that each owner will make these changes on their own tax return.

Open your return and search for "Schedule E" and click "jump to schedule e." Edit the rental property you need to work on.

Property Profile

1. On the page "Property Ownership," check the box for "No, I owned less than 100%." (This may appear on a page for "uncommon situations" in TurboTax Online.)
2. The next page will ask if you want to enter total amounts for your expenses, or if you want TurboTax to do the math. Enter your current ownership percentage if you want the program to do the math.
3. Continue to answer the questions until you are back on the Rental Summary Page.

Assets/Depreciation

1. A. If you entered a percentage of business use for each asset that was the same as your ownership percentage, you can enter the new percentage on the asset information page. 
2. B. But if you reported 100% business use and entered a basis equal to the percent of the property that you owned, you will need to retire all existing assets and add new assets using the revised cost basis.

Handling the change in asset ownership is complicated and requires attention to the details. In summary:

1. Review the existing asset and write down the cost, date placed in service, accumulated depreciation, and current depreciation.
2. Go back and report that you disposed of the asset by converting it to personal use (not a sale) as of the date before your ownership changed.
3. Add a new asset using a basis equal to the original cost less all depreciation and placed in service on the date the ownership changed.

Here are two posts to help you with this process:

• Expert DianeW777: How does change in ownership percentage affect depreciation?
• Champ Carl: How can I change the ownership percentage of a rental property asset?

If you believe you need additional assistance, consider using TurboTax Live, where a tax professional works with you to complete your entries, either over the phone or by sharing your screen.