I am self-employed and have had a home office for over 8 years. Every year, I take the depreciation deduction for my home office. Between August 2021 and June 2022 we lived abroad so I rented our home, at fair market value, 100% of the time Aug 2021-June 2022. In tax year 2021, I took a depreciation deduction for renting my home (Aug-Dec). I did not take any home office deduction (incl. depreciation). For 2022, I need to stop depreciation for my rental (I returned to live in it in July 2022), and possibly re-start depreciation for my home office (July-December 2022). How can I do this correctly in TurboTax?
My rental income In 2022 after expenses is ~10,000. If I try to convert it to personal use in TT, it brings my rental net down to ~3400. Could this be right? Here is what I am doing:
-State that I converted rental to personal use on July 1, 2022
-State that I have previously used this property for personal use, that I started renting it in August 2021, and that I rented it 100% of the time during the months it was rented (should I actually say that I rented it 50% of the time since it is a Jan-June rental?)
-Checked that the prior year’s depreciation amount is correct (it is).
-Check that I need special handling due to the conversion to personal use. Right after this question, TT gives me a deduction of over $6000. This doesn't sound right to me.
After the above is corrected, I would like to resume claiming home office deduction (including depreciation) for the months of July-December 2022.What would be the best way to do this correctly in TT? Alternatively, could I wait until 2023 to start claiming home office (and depreciation) deductions? I want to make sure I do this right. Thank you very much for your help.
