I want to stop renting and convert status from income property to 2nd home.
For tax purposes (I reinterate *FOR* *TAX* *PURPOSES*) there is no such terminology. (Well there is. But not in the sense you may think). You convert the rental property to personal use. Period. End of story. What that "personal use" may be is not defined on your tax return. When you convert to personal use, that stops all depreciation on the date of conversion. Additionally, expenses incurred after the date of conversion are just flat out not deductible. (Do not confuse *expenses* with *property improvements*. They are two completely different things.)
Will I be taxed on the depreciation taken so far ? what are the steps in reporting the change ?
No. Depreciation is not recaptured and taxed until the tax year you sell the property. So in the tax year you convert the property to personal use, make sure you print out the tax return and retain the IRS Form 4562's related to that property. You will need the information on those forms when you sell the property - even if you don't sell it for the next 20 years.
