1. The rental was never a primary residence, 0 personal use throughout the years, from purchase date to sale date.
2. Taking off from TT on 1/1/2015
So I assume the property was classified as a rental through 12/31/2014, and converted to personal use on 1/1/2015. Therefore, the property is reported on SCH E on your 2014 tax return, but not on your 2015 tax return. Therefore you need the two 4562's and the 8582 from your 2014 tax return.
, sold on 5/6/2021. It stayed vacant from 2015 till 2021 with no personal use.
Just because it was converted to personal use (and it was on 12/31/2014) does not mean you actually used it for anything personal. It just means it was no longer used as a business asset of any type for the production of income. Basically, it became a 2nd home on 1/1/2015.
2. Taking off from TT on 1/1/2015, sold on 5/6/2021. It stayed vacant from 2015 till 2021 with no personal use.
From the IRS tax perspective, it was a 2nd home you owned beginning 1/1/2015. The fact you never lived in it does not change that fact.
1. I could not find a place to claim the unallowed passive loss(from Form 8582) for the rental cumulated before being taken off TT. Can you please provide further guidance on that?
I'm not 100% on this, so I'm asking @Opus 17 to chime in. On the screen where you selected "Sale of Business Property", there's a selection just above that for "Net Operating Loss/QBI Carryforward Loss". I think that's where you deal with it. But please wait for confirmation from Opus 17, or another who is a flagged member of this forum.
2. I don't see the prior depreciation being recaptured as being added to AGI, even though that amount was entered in the sale of business property section under "Depreciation taken", not sure if the prior depreciation amount is to be entered in any other section in addition to sales of business property section to be shown as being added to AGI? or is it buried in any line of Schedule 1 or Form 4797?
If the sale was a loss even after depreciation recapture, then there's nothing to add to the AGI.
3. I wonder if I can add the rental back to TT in 2021, with 0 days of both business and personal use, as an alternative way of reporting the sale, it seems that in the rental section a passive loss carryover from prior year can be added; if that is a valid alternative, can the rental claim 2021 expenses such as utilities and property tax etc. in Sch E in addition to the passive loss carryover?
That's not right/legal since the property was not rented at all in 2021 or for 4 or 5 years prior, and has never been a rental since 2015. You flat out can't report anything on this property on SCH E. Doing so will mess things up for you royally.
