Rental - Removal of Mobilehome - Didn't rent in year 2025

[Birdie924]

Selected the rental property. Selected "edit".  Select "no" property wasn't rented in 2025.  Check mark, "I did not rent, nor attempt to rent. this property at all in 2025."  It then said, "Since the property was not a rental at all in 2025, you should delete it as a rental.  Make sure to keep your complete return, including the Depreciation Report for this property, from 2024 (or the last year this property was used as a rental).  You'll need that information when you sell the property or convert it back to a rental."  I will not be renting this again as it is a mobilehome on land I own.  The mobilehome will be demo or left in place.  What does this do if I handle this way?  What happens to depreciation?  Thanks.

[KrisD15]

If you demo the mobile home and there is no salvage value, there would be no depreciation recapture. 

If you leave it on the property, then if at anytime the mobile home is sold, you would report the depreciation (if any) in the year of the sale. 

When you placed the mobile home in-service as a rental, you gave it a basis. Basis is the value or your cost and that is what the depreciation is calculated on. 

For example, if the basis (value) was 27,500 when you placed into service and it depreciated 1,000 a year, and you rented it for 10 years, the depreciation would be 10,000 and your "Adjusted Basis"  would be 17,500. 

If you sell it for 17,500 or less, there is no depreciation recapture. Anything over 17,500 would be depreciation recapture.

If it is demo-ed, there is no value gained or recovered, and therefore no depreciation recapture. 

[Birdie924]

Thank you for the info.

The mobilehome will never be used again for rental, nor will it be sold.  It is a 1976 mobilehome and has had a great life.  

To account for it in 2025.  Do I do the following:

THE MOBILEHOME WAS TAKEN OUT OF SERVICE ON 12/31/2025.

1.  Navigate to the Rental Income and Expenses Section of return.

2.  Select the mobilehome rental.  "EDIT"

3.  When it ask if property was rented 2025?  "NO"

4.  When it ask if I attempted to rent it in 2025? "NO"

After entering the above the following statement appears:

"Since the property was not a rental at all in 2025, you should delete it as a rental.  Make sure to keep your complete return, including the Depreciation Report for this property, from 2024 (or the last year this property was used as a rental).  You'll need that information when you sell the property or convert it back to a rental.

It that the proper way to remove from 2025 taxes?  

Again, I will not be selling the property or renting in the future.  

Thank you.

[DianeW777]

Yes, you can handle the mobile home as you have indicated.  It will be removed from service and if you follow through with demolishing it, without any compensation, there will be no taxable event.

As indicated in your previous post, If any asset was listed under the rental such as a lawn mower, as example, then records must be maintained for those as well.  These type of assets should be marked 'converted to personal use'. Once converted to personal use, they are still a taxable asset until sold or destroyed.  Keep records for any other assets separate from the mobile home.

@Birdie924 

[Birdie924]

Thanks to everyone for your help on my questions!  You are all appreciated!