"When you say they are converted to Schedule E, what do you mean by that? How to report is not a choice, it is based on average days of rental and substantial services. Did the average rental days increase to over 7?"
I know all about Schedule C, E, and Pub925 regarding what is what, I went through all of that originally with 2022's return... I know it is not a choice how to report, but IT IS a choice how I manage the properties.
It is exactly as I said. I decided to convert (how a property functions) to a passive that was not passive prior. Again, my question is regarding 1099k Reporting from these STR platforms and the prior accounted deprecation from the 39 years over to 27.5.
With the 1099k question I can only think of 2 ways, but please let me know what is the right way or if there is another way. Do I stick the 1099k gross into schedule C income then deduct the portion that is Schedule E income, then report it in Schedule E as income, or do I just take the portion out of the 1099k gross outright and stick it in Schedule E?
Regarding the prior years' depreciation, it needs to be deducted from the cost of the property, then starting from the beginning of the year needs to be accounted for using the 27.5 method. Is that correct?
Example: Property Closed at 200k and opened as a Schedule C rental July 01, 2023.
2023's depreciation is 200k / 39 / 2 = $2,564.10
Converted to Schedule E January 01, 2024 depreciation needs to account for this.
So 200k - 2,564.10 = 197,435.90 | 197,435.90 / 27.5 = $7,179.49
So in this example 2024's Property depreciation would be $7,179.49. Is this the correct method?
