Just report the sale in the "Sale of Home (Gain or Loss) section and you'll be fine. You'll be asked for non-qualified use, as well as prior depreciation already taken.
For 2016 he simply listed the property as a rental to carry forward suspended losses with no rental income/expenses or depreciation claimed. I did it the same way for the following years until I had the opportunity to claim those losses last year. It was simply a placeholder.
You might want to check that. If you used TTX any year after converting the property to personal use and a SCH E was generated by the program, then "something" was deducted; most likely depreciation. The program will not allow you to have a SCH E if the property was not classified as a rental for at least one full day of the year.
Now there are other forms that allow you to carry forward NOLs for a closed SCH C and other non-passive business types. But I'm not familiar with how that works with a SCH E passive income business. I do believe SCH C NOL carry-forwards are not treated the same as SCH E losses. But don't quote me on that.
