1031 property Conversion

Forum|Forum|5 years ago
March 23, 2021
1 reply
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How do I report the conversion of a rental property previously obtained in a 1031 exchange to my primary residence?

gloriah5200

Level 10

Here is some information regarding changing a rental property into a principal residence.

Be aware that you will have to recapture the depreciation 'allowed or allowable' for the period of "nonqualified use" as a rental.

Here is a link on taking a rental out of service:

Taking a rental out of service

IRS Publication 523 explains how to change a rental property to a principal residence and how to determine the "period of nonqualified use" and how that will affect the gain/loss on the sale of the house as your principal residence.

For additional information please refer to the following link"

IRS Publication 523

Gene45Author

Level 2

Thank you for the quick reply. I'm still having difficulty understanding how to report the conversion to a primary residence from a 1031 property. I don't see a way to report the conversion and identifying it's new status on a form 8824 or if that is necessary.