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Investors & landlords
Typically in your situation, when you report your disposition of the asset you'll be presented a "Special Handling Required?" screen. If you select YES, I don't know if the remaining depreciation amount is deducted in the year of disposal, or not. I don't think it is, because one of the listed reasons is "removed for personal use".
However, if you select NO you will be asked for sales information. Give it a sales price of $0 and it will be treated as sold at a loss. Any remaining depreciation to be taken will then be deducted from the rental income, and may very well be added to your passive activity loss carry over, if you have any. (You may not.)
‎February 26, 2022
7:09 PM