If I convert the rental back to personal use to stop the depreciation, what happens to all of the expenses they are incurring to get the house back to being habitable for rent?
Hi @taxlady1971
I take note that you are not the one who started this thread. So my first thought here is exactly what are *YOU* calling expenses? I have absolutely no clue what *YOUR* specific and explicit situation is. I would suggest you start a new thread (and you can tag me in it if you like) and explain all of "your" specific details. What happened? When? What was damaged so as to make the property unrentable for a prolonged period of time? Was there an insurance payout? What specifically was the payout for?
When you "tag on" to a thread you did not start, this inevitably leads to confusion by all parties participating in the thread. So if you'll start your own new thread and tag me in it, I'll be happy to address your specific situation.
When dealing with something akin to hurricane damage or a fire that renders the property uninhabitable, you're dealing with two separate things. First there's your loss. Second is your "gain" on the insurance payout and the work done with that money to make the property habitable again. If there was no insurance payout, you still have a "gain" on what you paid for the property improvements in the form of an increased cost basis on the property.
It can get complicated. But if you take it "one" "step" "at" "a" "time" it's perfectly doable with TurboTax. Overall though, if you haven't filed your 2019 tax return yet, then you're late. If you believe you will owe the IRS additional tax for 2019 then you should seek professional help so this can be taken care of ASAP. The sooner you file and pay, the sooner the late filing penalties and interest stops accumulating.
However, if you are confident you will be getting a refund, then a late filing will not result in any fines, penalties, late fees or interest. But you have 3 years from the due date (Jun 15, 2020) to file. If you file after three years, you forfeit any and all refund money you may be due.
