Assuming all of this occured in 2019.
First, you will convert your existing rental (which is for the room you rented) back to personal use. After you do that, work through the rental again and you will "NEED" to write down the following information.
Prior year's depreciation taken
Current year's depreciation for 2019
Add those two numbers together to get the total depreciation taken while you were living in it and renting out rooms.
Next, you will enter a *NEW* rental property.
You must reduce your cost-basis on this new entry by the amount of all depreciation taken on this property. You will only reduce the cost basis of the structure and any other assets you may have taken depreciation on before. For the property itself, you will not under any circumstances reduce or change the "Cost of Land" amount. Example:
When you lived in it and rented out rooms.
Cost $200,000
Cost of Land $50,000
That means the structure was valued at $150,000. So if you rented out 1/3 of the floor splace, then $50,000 was the cost basis used to figure depreciation year-to-year you had that space rented out. So lets say you rented it for 5 years and have taken a total of $10,000 of depreciation.
When you convert the entire house to a rental here's what you'll enter for your costs.
COST $190,000 (Original cost basis minus the $10K of depreciation taken already)
Cost of Land $50,000 (the value of the land does not change, since land is not depreciated.)
So with the entire house rented out now, the structure value of $140,000 is what will be depreciated over the next 27.5 years.
