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Carmen Hess
Returning Member

No longer using one of my homes as a rental, how do I relay this information?

no longer using a former rental as a rental because husband needed home without stairs.  We moved into this former rental.  Not rented all of 2020.
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2 Replies
ColeenD3
Expert Alumni

No longer using one of my homes as a rental, how do I relay this information?

In the rental section, go in and indicate that you converted it to personal use and that you had zero rental days. Print out your depreciation forms because you will need to recapture the depreciation when you sell. Also, if you had any unallowed passive gains, print form 8582.

Carl
Level 15

No longer using one of my homes as a rental, how do I relay this information?

If you did not convert the property from rental back to personal use on your 2019 tax return, then you need to do so on your 2020 tax return with a conversion date of 1/1/2020.

As you start working through the rental (about 3-4 screens in) make sure you select the box to indicate that you converted the property from rental property to personal use.

For rental income, enter zero. (You MUST enter "something" in the income section, even if it's zero.)

For rental expenses, since you can't possibly have any rental expenses, you don't even need to work that section through.

Next, you "MUST" work through the assets/depreciation section and elect to edit each individually listed asset one at a time.

As you work through each asset you will come to a screen that asked "Did you stop using this asset in 2020?" You must click YES. Then a screen or two later you'll come to "Special Handling Required?" On that screen you must click YES. If you click NO, then you will be "forced" to enter sales information. Since you didn't sell the property, you click YES.

Note that you absolutely must do the above for each individual asset listed in the assets/depreciation section. Make sure that you enter the same exact date for each asset, that you converted it to personal use. 

This means that 2020 will be the last year you will report this property on SCH E. You will also need to print out the IRS 4562's for this property (both of them) and keep them forever. The information on those forms will be required in the future when one of three things happens in your life.

1) You sell the property

2) You convert the property back to rental use.

3) You die.

 

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