Filed our property as depreciation asset in Schedule C last year, can I file it under Schedule E this year?

[jbllc]

We are married couple who purchased a condo in Colorado and live in this property for the entire 2021. We opened a LLC and rent out the guest bedroom & bathroom for monthly stays shortly after we move in. My spouse is the housekeeper and provide service such as cleaning the bedroom & bathroom daily, changing linens weekly, do their laundry and serving meals occasionally. My spouse also build a dedicated work space in the living room to run a small online business. For the 2021 tax year, I filed 50% of the purchase price of this property as depreciation asset in schedule C. 

This year my spouse got a job and we did not provide the B&B service. She only continue to run her small online business. In August, we bought a new house and moved out of the condo. We listed the condo as short term rental on Furnished Finder since then, but we were not able to secure a tenant until November. So the condo is only generating passive income for 2 months in 2022. 

My question is, for tax year 2022, can I file the condo under Schedule E as rental property?

I am confused because I have filed the condo as depreciation asset in Schedule C last year.

Thank you and appreciate your advice.

[Critter-3]

My question is, for tax year 2022, can I file the condo under Schedule E as rental property?  Yes you can but due to all the changes in the use I highly recommend you seek local professional assistance to get this transferred correctly   OR  use one of the LIVE TT online program options. 

[Mike9241]

this is not a situation that Turbotax will be able to handle. yes it goes on schedule e for 2022 but the issue is transferring the assets and depreciation from schedule C to schedule E. 

the home office in 2021 should have been depreciated over 39 years. but now that it's not used in that manner in 2022 it gets depreciated over 27.5 years. also when a B&B only a portion was depreciated over 27.5 years, now 100% is eligible. 

it may be doable but in essence you would need to enter 3 assets. the home office part, the B&B part and the rest of the condo excluding land cost, if any.  there's still a debate as to whether you purchase a portion of the land when you purchase the condo. 

[Carl]

You *NEED* to seek professional help for this. Especially if your state taxes personal income. One reason (of many) is because a SCH C property is depreciated over 39 years, while a SCH E property is depreciated over 27.5 years. You can "NOT" make the switch correctly with the TurboTax program. You *NEED* (aka *REQUIRE*) professional help to get this done correctly. Additionally, you will have to take note of depreciation taken while it was a SCH C property, as even with professional help prior SCH C depreciation can NOT be tracked or accounted for on the SCH E in the way required. This will matter big time in the future when you sell or otherwise dispose of the property.