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.
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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?".
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.
Thanks very much. Solves my problem.
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