1) seemed like it was using pulling the FMV at the time we converted it to a rental. That is probably because that is what you entered in the asset section. The correct way to do it is the lower of FMV or basis at the time of conversion. If you did not set it up that way initially, the program followed the entered format the entire time.
2) Is there a reason that I couldn't do it that way?
It may be possible. I have never done a practice return that way. I imagine if you do not enter any information about the sale and you remember to include the 2020 depreciation to recapture it, then it would be okay.
