Here's how to do this.
Dad:
First, convert the property to personal use on your tax return. This stops all depreciation on the property on the date of conversion.
I want to stop reporting it in mine tax return for 2021 and have my son to report everything in his tax return for 2021 tax year.
Since (I assume) you have received all the rental income and paid all the rental expenses for 2021, use a conversion date of Dec 31, 2021. You'll be reporting everything concerning the rental on your 2021 tax return.
Son: Will enter the property on his 2022 tax return next year using the original purchase/acquisition date, but with a conversion date (from personal use to rental) of 1/1/2022. The cost basis on the property and all assets will be dad's cost basis, minus all depreciation dad took on the property and all assets.
For the property itself, the "cost of land" will not change. Only the cost of the structure will be reduced by the amount of depreciation dad already took on it. Depreciation on all assets will start over on 1/1/2022 and the property will be depreciated over the next 27.5 years.
To get prior depreciation already taken, look at dad's 2021 tax return. You're looking for two IRS Form 4562's. The two you need print in landscape format. One is titled "Amortization & Depreciation Report" and is most likely the only one you will need. The other is titled "Alternative Minimum Tax Depreciation Report" and if you need the data from that one, the program will specifically ask you for AMT depreciation information.
