Personal home showing up as a rental property - how do I fix that?

[lilli2]

I converted a rental property to my primary residence in 2022 and noted the conversion in my 2022 tax return that was prepared on Turbotax. Now I am working on my 2023 return and TurboTax thinks the property is still a rental.
The help chatbot provided instructions for updating the property details that do not work. I am to open my return, search for rental properties and use the jump to button to reach the right screen. I get no jump to button when I search, only a long list of tangentially related articles.
I can navigate to the rental property section of the tax interview but I cannot update the property details there. I can delete the property entirely -- but that will remove all the capital improvement and depreciation details I will need if I sell the property in the future.

How do I fix this?

thanks!

[MarilynG1]

Actually, you can remove the Rental details in your 2022 return when you indicate you 'converted to personal use' and a date in the Property Profile section and the Assets/Depreciation section.

Make note (or save forms/worksheets) showing Depreciation claimed (and unused) for the House and any Improvements you were depreciating.

When you sell the rental property later, the sale is entered as the Sale of Business Property, where you will be able to add Sales Expenses to your Remaining Basis to determine gain/loss. 

You should go back and Amend your 2022 return, as you probably claimed rental income/expenses/depreciation for part of the year prior to the conversion and then transfer your amended 2022 return into a new 2023 return.

[lilli2]

Hi MarilynG1, Thanks for your response! Unfortunately that solution will not work. 

I did indicate that I converted the property back to personal use in my 2022 return. Then, Turbotax prorated my expenses incorrectly and I had to fix it manually. See this thread:  https://ttlc.intuit.com/community/taxes/discussion/expenses-for-rental-converted-to-personal-propert... Reviewing my 2022 tax return  Schedule E Line 2, I see that it accurately indicates the number of Fair Rental Days and the number of Personal Use Days.  Schedule E Line 18 claims a depreciation expense that is the correct fraction of the depreciation claimed in 2021 given the date of my conversion.

The property is no longer a business property. If and when I sell it later, it will be sold as my personal home, although I understand I will have to pay back previously claimed depreciation.

You are correct, I did claim rental income/expenses/depreciation for part of the year prior to conversion - and that was proper, because I was renting it out before the conversion. Why would that create the need to revise my 2022 tax return? I think 2022 was done correctly.

[DawnC · Accepted solution]

Delete the rental property if it was not rented at all in 2023.   Your personal home does need to be listed anywhere in TurboTax.   You can still take your itemized deductions on the home on Schedule A, but you can just delete the property.   If that was your only rental property, you can delete Schedule E too.    

How to delete forms in TurboTax Online

How to delete forms in TurboTax Desktop

[lilli2]

Hi thanks DawnC, I will do that. 

I guess I will make a table to summarize all the capital improvements and depreciation I claimed over the few years of renting, for easy reference in the future. 

Thanks again!

[DawnC]

That is a great plan, you should do that so when you sell the home, you can easily add the home improvement amounts to the basis to lower your gain, and recapture any depreciation!