Rental Property temporarily used for personal use then converted back

[seanwsmithtaxes88]

I bought a home in 2018 and lived in it for personal use until in 2019, I converted it to a rental property. In 2021 moved back in for one year (personal use) from 8/2021 - 8/2022. In 2022 converted it back to a rental property and plan to keep it as such going forward. I had prior depreciation on the home. I am trying to reflect as such, and now it is saying my depreciation for 2022 is $0. Below is the message I get. Shouldn't I still be able to depreciate for the period I converted it back? 

Your depreciation deduction for Residence for 2022 is zero.

We'll transfer this amount to the correct form for you.

[PatriciaV · Accepted solution]

You may need to review your entries for the Rental Asset from the Property Asset list on the Property Info page.

Because you took it out of service for personal use, you'll need to adjust your basis for the total depreciation taken while it was a rental. Your new "cost" will be the purchase price less the accumulated depreciation (you'll find this on the depreciation report in the return for the year that you stopped using it as a rental).

Under "Tell us more about this rental asset," check the boxes for "I purchased this asset" and "No, I have not always used this item 100% of the time for this business." the date you first started using it as a rental will be 8/2022, not 2019. The business use percentage will be 100% now.

You should not be prompted to enter prior depreciation because the start date is in the current tax year.

On the Asset Summary page, check the box for "Show Details" to confirm how depreciation is being calculated.

[seanwsmithtaxes88]

Thank you, very helpful. Small clarification, do I need to adjust the number of years from 27.5? Like do I need to subtract the number of years I already depreciated in addition to the amount I already depreciated? And if so, I assume by number of years I was using as a rental, not number of years total (including the period of personal use when I didn't depreciate).

[PatriciaV]

No, TurboTax will use the correct number of years for this property. You have already accounted for the prior years by reducing the purchase cost by the prior depreciation. Any, yes, this is depreciation as a rental. 

The original purchase date doesn't factor into the useful life of a rental property. When you first started renting the property, it had a useful life (according to the IRS) of 27.5 years. You took it out of service for a few years. After placing it back into service, it has another 27.5 years of life to be depreciated as a rental.