If you reported an incorrect basis in the year of the conversion from personal use to rental property, you have two choices:
- amend all prior tax returns that used the incorrect basis so that you can report the correct basis this year or
- adjust the basis and accumulated depreciation on this year's return and manually complete & file Form 3115 Change in Accounting Method. Because Form 3115 is not supported by TurboTax Online in the interview, you may wish to switch TurboTax Desktop (available in Forms Mode). Consult the instructions for this form: Instructions for Form 3115.
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