How to stop taking depreciation of rental house taken off market (but not sold)?

[Jacks-son]

We've owned a rental house that we took off the rental market during 2024. We renovating it now and plan to live in it, hopefully for many years.

Where do we enter in Turbotax forms or interview process the date at which the house was no longer a rental, so that we can suspend any further calculations of depreciation?

We're using desktop turbotax (Windows).

[DavidD66 · Accepted solution]

You will treat it as a disposition (like a sale) only you will indicate that you are converting the property to personal use.  To do this in TurboTax, you go to the rental activity.  Select the Assets section, and then for each asset associated with the rental (house, land, appliances, etc) you will:

• Indicate that "This item was sold, retired, stolen, destroyed, disposed of, converted to personal use....'
• Enter the date you removed the property from service (even if vacant, if you were trying to rent it, the property was in service).  Answer 'Yes' you always used this asset 100% of the time for business. (The percentage of use doesn't change until after conversion from rental to personal use.)
• Select 'Yes' for Special Handling due to 'You converted the asset to 100% personal use'.

You may see some depreciation expense which will be the partial year amount.  Enter any expenses you had for the part of the year it was still in service as a rental.

Keep copies of all your tax returns, depreciation reports, and rental records.  They will be necessary if you ever sell or gift the house to a family member. All depreciation will be recaptured and any suspended losses released at that time, regardless of how long you hold the property for personal use. 

[Jacks-son]

Thanks, DavidD66.

Working through it, line-by-line. Wouldn't have found it w/o your help.

Jacks-Son