It depends. If you rented the full property in 2024, then you can change your percentage to 100% and use the full cost of the property for depreciation. Keep track of the depreciation you used for part of the property by keeping the information with your tax files until you actually sell the property.
No, the whole property was not being depreciated when you were using only a percentage if that percentage (days and/or square fee) was entered into the rental asset. It's up to you but you can remove the partial rental using the steps below (enter the date of the change as the last day). Next add the full asset at 100% but with the new date beginning in 2024.
Finish Partial Asset: Based on earlier discussions you will use this full amount from 2019-2023 as an expense using Form 3115. Be sure to enter the starting date of 2019.
When you are in the rental activity for 2024, you must select the 'Assets' section, then in each asset you must go to the screen titled 'Tell Us More About This Rental Asset'.
- Once you reach this screen for each asset, you must select 'This item was sold, retired, stolen, destroyed, disposed of, converted to personal use....'
- Next enter the date you stopped using the asset for rental purposes. And answer 'Yes' you always used this asset 100% of the time for business. (The percentage of use doesn't change until after conversion from rental to personal use.)
- Select 'Yes' for Special Handling due to 'You converted the asset to 100% personal use'.
You may see some depreciation expense which will be the partial year amount. For the period of the year it was available for rent, you may have some expenses which are allowed for that open period. Keep all of these records because you will need them when and if you sell this home. All depreciation will be recaptured at that time, regardless of how long you hold the property for personal use. The records are necessary until you completely dispose of or sell the property.
Start the Asset for the Full Amount: Simply add a new asset and enter the full cost including land, then enter the land when asked. TurboTax will use the difference when calculating depreciation. The depreciation will be straight line mid month (SLMM) over 27.5 years as was on the partial rental.
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