There are several ways to do this. I will cover the easiest/simplest.
Indicate that you converted the multi-family unit to personal use in 2020. (You pick the date, based on your paperwork for sub-dividing). When done, with that conversion entirely, work through the assets/depreciation section and for each individual asset write down the total depreciation taken. The total depreciation taken will include prior year's depreciation, and the current year's depreciation up to the date you converted it to personal use.
You will also need your cost basis on the property, which is sown on the screen with COST and COST OF LAND on it. Those values will matter. COST is what you paid for the property in it's entirety when initially purchased. COST OF LAND is that portion of COST that was allocated to the land.
Now you will enter two entirely new rental properties, one at a time.
Fist, you must divide your COST between the two by whatever you determine is reasonable and realistic. It could be a 40/60 split, or something else. then you will reduce the cost basis for each individual property by the depreciation already taken. You can split the depreciation between the two properties, using the same percentages that you split the cost basis.
Then you have to assign a portion of that cost for each individual property, to the land for each individual property. Now here's the tricky part.
For both of the "new" properties, when you add together the value of the land for each, the total must equal the original value of the land when it was a multi-family unit. This is because land is not a deprecated asset.
The "new" value in the "COST" box for each property will be reduced by the amount of depreciation already taken on that property. Then depreciation will start over from the new "in service" date. That new "in service" date for each property, must be at least one day "AFTER" you converted the multi-family unit to personal use.
Depreciation for each property will start over and will be depreciated based on the new "adjusted" cost basis for each property, over the next 27.5 years.
