Convert a rental property to primary residence in Desktop version of Turbo Tax

[ladykat]

Hello,

I have a small rental property that I have rented out for over 15 years. At the end of 2023 I decided to make the home my primary residence but have not moved into it yet because I need to make major improvements and finish battling with the county on these improvements. So it sat empty all of 2024.

Now that I am preparing my 2024 taxes (using the desktop version) the software is automatically giving me the annual depreciation deduction. I can't find where I answer a question or let the software know that this is no longer a rental property, although I don't live there yet.  Should I just delete the rental property at the beginning of the rental property section? I assumed that I would be able to select that it is no longer a rental so that all of the prior depreciation is still on record with TT.  What am I missing? Where can I indicate to TT that is no longer a rental?

Thank you for your input!

[AnnetteB6 · Accepted solution]

Go to the Rental Income and Expenses section of your return and edit the Property Profile section.  There will be a page with different characteristics of the rental property where you will find a box to check for converting the rental to personal use.  Check that box and follow the prompts from there.  You could select 01/01/2024 as the conversion date, which will indicate that the property is no longer a rental.  

Then, you will probably need to go to each Asset that is being depreciated (including the house itself) and edit the information.  There will be a question that asks if you stopped using the Asset for business/rental.  Answer 'yes' and enter the date it was converted to personal use.  That will stop the depreciation.  

Be sure to keep records of the total depreciation that was taken during the time the property was a rental.  You will need this information when you sell the property later.

[ladykat]

Thank you AnnetteB6!