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Investors & landlords
Glad to help. Just understand that this means for 2020 you will have three rentals on the SCH E. The multi-family setup will be in column A, and the "new" unit 1 (for lack of a better name) will be in column B, with the "new" unit 2 in column C.
I do want to stress that you make absolutely certain that on the multi-family setup, you convert "everything" to personal use. Each individual asset, one at a time. Also, if you claimed any vehicle use on the multi-family unit, you must also show that vehicle removed for personal use. Doesn't matter that it was less than 100% business use, or that you only claimed it in a tax year prior to 2020. If it's not done right, then the multi-family will be imported into your 2021 taxes next year.
Now there are situations where you do "in fact" do everything correctly. Yet, the property that is no longer a rental gets imported anyway. When that happens, and you are 100% certain you did everything right the prior year, you can just delete that property from the 2021 tax return and press on with life. You'll be fine.