@KittyM
Hi Kitty. If my last renter moved out end of Sept. 2018, then major improvements took place through March 2019 and sale occurred in May 2019, how do I account for the siding, carpet, flooring etc. improvements being replaced in Fall 2018 and into 2019? They were large expenses, greater than $35k. I added them as depreciable improvements in 2018 but now, in 2019, I am getting hit with the higher depreciation recapture tax vs. capital gains. My depreciation schedule on all items ran until the house sold and I'm realizing now, I maybe should have stopped depreciation on the date of the last renter moving out. All tolled, I have accrued about 7k in extra depreciation that I would rather see on the capital gains side of the equation, for the 2019 sale, vs. additional depreciation recapture.
Would it be better to amend 2018 and expense all those improvements, with perhaps a loss carry-over to 2019, and put it against the gain on the sale?
How do you tell TTax that it stopped being rental property (and halt the depreciation schedules)? We have never lived in it; do I "convert it to personal use" on tenant move-out date?
Does it have to be 'converted to personal use" in order to do that? All the expenses continued after rental period - utilities, mileage to/from, supplies, etc. etc. and I still want to be able to expense all those items in 2018 and 2019 respectively. Is there a 'middle' way to tell TTax > it is still investment property but not being used for income purposes or 'personal use'?
The fact that the income generating part stopped in one tax year but some of the improvements and sale occurred in the following year have me guessing.
