@Reds70 this whole thread is basically screwed up, because it originated in 2018 or before, and the original starting post pertains to 2017 taxes or before. So that's why it's hard to follow the "facts" for a add-on post such as yours without getting confused.
Basically, if the last renter moved out in 2019, then leave well enough alone and do not convert the property back to personal use. You'll then report the sale in the SCH E section of the program and your life will be a whole lot simpler and easier.
If the last renter moved out in 2018 or before, and you did not so much as advertise the property for rent and had no intention of renting the property between the time the last renter moved out, and the date of the sale, then you need to convert the property back to personal use in the first full tax year the property was no longer available for rent.
So technically speaking, if the property was no longer available for rent on/before Jan 1, 2018 then if you didn't indicate that already on your 2018 return, you'd need to amend your 2018 return and convert it to personal use with an effective conversion date of 1/1/2018. The issues with doing this are multiple.
1) Since you'd be amending the 2018 return, if you used the online version to complete your 2018 return, you get to jump through a lot of hoops having to download the 2018 CD version of the program, install it on your computer, then download your .tax2018 file to your computer and amend from there.
2) Since an amended return can not be e-filed (the IRS says so) you then have to print, sign and mail it to the IRS. To top that off, since amended returns are processed by hand, it can take 16 weeks or longer for it to be processed.
3) You can not even start your 2019 tax return until you have completed amending your 2018 return. That's the only way possible to ensure you import the "CORRECTED* data from your amended file.
4) If using the online version of the program for 2019, then you have to pay attention to detail so that you import your 2018 data from the amended .tax2018 file that physically resides on your computer, and not from the original .tax2018 file that resides in your online account.
5) When you go to e-file your 2019 return, it will be rejected because it will be using the AGI from the amended return that the IRS has not processed yet. So you will have to take physical action to change the 2018 AGI the program is asking for in the e-file process, to the original AGI in the unamended .tax2018 file that resides in your online account.
If the last renter moved out in 2017 and you did not advertise after that, then you get the pleasure of amending your 2017 return to convert the property to personal use. Then you get to amend your 2018 return to remove the property entirely from that year. Then both amended returns have to be printed, signed and mailed to the IRS each in a separate envelope.
Welcome to your nightmare. 🙂 The best way to handle this is to only concern yourself with one tax year at a time. You can't even start your 2019 return until you've completed amending the prior year returns as far back as needed.
If you used the CD/Desktop version of Turbotax do to all those prior years returns, then it's not so bad. Instead of a nightmare, it's more of a bad dream.
