1. What is the official start date for depreciation - "Date of Conversion" or "In service date?"
It's the in service date. The MACRS class of residential rental real estate uses the mid-month convention. So regardless of what day of the month you place the property in service, depreciation is figured from the 15th of that month.
2. Hypothetical example here, but if I understand what you are saying about the tax code correctly, could someone have declared their "date of conversion" and "in service date" as 12/31/22 and then taken the whole 100% bonus depreciation for 2022?
No. The MACRS classification of Residential Rental Real Estate is not eligible for SEC 179 or SDA Bonus depreciation. It gets depreciated over 27.5 years. (30 years for foreign rental property placed in service after 2017).
Keep in mind that depreciation is not a permanent deduction. Whenever you sell or otherwise dispose of the property you are required to recapture that depreciation and pay taxes on it in the year you sell it. You have to recapture the higher of the depreciation taken, or depreciation you should have taken. So don't think that not depreciating the property will get you out of that. It won't.
