Rental Property Prior Business Use - Rental was formerly primary residence with a home office for sole proprietor

[hnataraj]

I own a rental property that was rented out for 2023. Prior to 2023 it was my primary residence, and I had a home office deduction on it. The home office was associated with a sole proprietor business (Schedule C).

I have taken the home office depreciation for a few years ending with 2022, when I converted my primary residence to a rental.

For 2023, regarding the rental property, TurboTax Desktop is asking me "Any prior business use?". i.e. any prior business use of the rental before 2023.

Questions:
1. How do I answer the "Any prior business use?" question? YES or NO??
2. If I answer YES, in a subsequent screen TT is asking me "Depreciation post May 6 1997?". How do I calculate this depreciation? Do I need to sum up the annual home office depreciation dollar values for the years leading upto 2023?

Please advise.

[DianeW777]

Here are the answers to your questions.  As a side note, the home office was being depreciated as a nonresidential property over 39 years. The rental property now will be depreciated as residential property over 27.5 years.

Questions/Answers:
1. How do I answer the "Any prior business use?" question? YES or NO?? -- Answer Yes
2. If I answer YES, in a subsequent screen TT is asking me "Depreciation post May 6 1997?". 

1. How do I calculate this depreciation?  Add all amounts you used as a deduction on your business returns.  See additional notes below.
2. Do I need to sum up the annual home office depreciation dollar values for the years leading up to 2023?  Yes, you would add all the depreciation amounts that were actually used for a deduction on your business schedule.  Sometimes the home officer is limited so be sure you use only what has been taken on your returns before 2023.

Note:  The math would be the business use percentage of the home office cost, less land, then divided by 39 years, multiplied by the number of full months and adding half a month for the first month and the month removed from business use.  

• You can use this method, but you may not have deducted all of it.  
• If you did deduct your full home office expense on your Schedule C each year, this would be a quick calculation.

[hnataraj]

Thanks very much. Solves my problem.