Converting rental property to primary residence

[m_m_morrison]

we had an apartment that we rented for part of 2015 but moved into and in 2016 it was our primary residence.   Can I just delete it from my return?

[user96021]

are personal days the same as days I lived in the property after converting to primary residence?

[PaulaM]

No. Personal use days are the days you used the property after it was placed in service.

[PaulaM · Accepted solution]

No. Deleting the rental is not the best solution. You need to dispose of it in the rental section.

In the rental property section under your Property Profile, indicate that in 2016 you converted the home from a rental to personal use.

On the page, Was This Property Rented for All of 2016?, select 'no' and enter the number of rental/personal days. Continue to enter the rental share of interest, property taxes, insurance, etc.

After entering the expenses, navigate to the Asset section to dispose of the property. Do this for any other assets you may have been depreciating as well. This will calculate any remaining depreciation up to the conversion and remove the worksheets going forward.

See attachments.

[tyler-g-haney]

My version (home & business) shows assets/depreciation instead of sale of property/depreciation.  how do i handle my depreciation with the switch from a rental to primary?  rented up until july 1 when made my primary.

[PaulaM]

In the asset/depreciation section, indicate that you converted your property to pesonal use and the date, on the page 'Tell Us About This Rental Asset'

[tyler-g-haney]

when i click on asset/depreciation, i get these screens "do you want to go directly to your asset summary?", "Did you buy any items for any business, rental property and/or farm that cost $2500 or less in 2016?", "Did you make improvements to Idaho Rental in 2016?", and "Your Property Assets".  If i click on an asset i get 'Review Information', but I can't find a 'tell us about this rental asset'.

i did follow the converted_to_personal.jpg you posted earlier, but i can't find where to dispose of assets.

[tyler-g-haney]

looks like you need to go to 'your property assets' and select edit on each item... then hit continue and answer 'did you sotp using this asset in 2016?' (converted to personal use ==> yes), then enter the date of disposition, hit continue, 'special handling required? (converted to 100% personal use ==> yes), then continue.

[speedway121]

@tyler.g.haney Under the "Your Property Assets" Section I have 15 different items that are depreciated. I realize the TT software asks "DID YOU STOP USING THIS ASSET IN 2017... click yes if the item was "converted to personal use" "  - However the IRS says that I cannot capture ALL the suspended losses from this property until I SELL THE property (Not just convert it to personal use). I did not sell the property. Are you sure We are supposed to fill in the date of sale or disposition here? Is this making sense? Is TT going to stop the depreciation as of the date and then allow me to take the deduction against my already negative income now?

Also Do I need to Edit EACH item (I have structure listed as a line item and other items including kitchen cabinets, washer/dryer/ etc..
What do I do with the section 179 Depreciated items???

[yosemiteg]

I have the same question regarding converting property from rental to personal use.  Under depreciation, when it asks if I stopped using it and I say, "Yes", it then asks Asset Sales Price, Asset Sales Expense, Asset Land Sales Price, Land Sales Expenses.  I haven't' sold it.  I don't' know where I would find these numbers?  Help?

[Carl]

@yosemiteg please see "my" response in the thread at https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/i-converted-my-rental...

If you are being asked for a sales price, then it's because you specifically and explicitly told the program you sold it. There is no other possibility. Just follow my instructions and (I can't stress this enough) pay attention to the SmAlL pRiNt on each screen. It matters, big time.

[yosemiteg]

Thank you so much.  I tried that option but didn’t know if it was right.  

[Goose9]

Thank you Paula

Also Would I qualify for previous years losses etc or do I lose them because it is no longer in the rental program

Thank you

Steve

[Carl]

Would I qualify for previous years losses etc or do I lose them because it is no longer in the rental program

Your carry over losses can not be "realized" until the tax year you sell the property. So it is important that if you converted the property back to personal use in 2019, you print out the tax return and file it away in a safe place. At an absolute minimum, you will need both IRS Form 4562's and the form 8582 from the 2019 return when one of three things happens in the future.

1) You convert the property back to rental or other business use.

2) You sell the property

3) You die.