To show the IRS that you converted the property from Residential Rental Real Estate, to personal use:
In the Assets/Depreciation section you must work through each individual asset one at a time.
On the screen for "I stopped using this asset in 2023" select YES.
On the screen for "Special Handling Required?" select YES. (If you select no, you will be FORCED to enter sales information. Since you didn't sell the property, you must select YES.)
If you claimed any vehicle expenses for this rental, then you must also work through the business vehicle expenses section and do the same to convert the vehicle to personal use.... even if the business use was less than 100%.
After you have completed and filed your taxes, you also need to print a few things from your ACCEPTED tax return and keep them for your records.
1) Print the IRS Form 8582. This form shows your passive loss carry overs. You will need this information as explained below.
2) There are two form 4562's. One is titled "Depreciation and Amortization Report" and the other is "Alternative Minimum Tax Depreciation Report". Print both, as you will need them later as explained below.
In the future, one of three things "will" happen in your life.
1) You sell the property.
2) You convert the property back to a rental or any other business use.
3) You die.
You will need these printouts to correctly report events 1 and 2, and your estate/heirs "may" need it (mainly for reference) in dealing with whatever happens to the property if you die. Note that it is perfectly possible The 8582 maylnot be present. That just means that you have no losses to carry over, and is perfectly possible due to changes in tax law that took effect in 2020 or thereabouts. File these papers with your property ownership documents so they'll be easy to find when needed in the future. If you have reported the conversion correctly, then nothing concerning this property will be imported into future tax returns.
