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July 7, 2020
Question

Do I delete a house that used to be a rental for 12 years and converted to my primary home mid-2018, as an asset on my 2019 list of rentals and lose history in Turbotax ?

  • July 7, 2020
  • 1 reply
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We moved to this rental in June 2018, still claimed it partially a rental for that year but in 2019, we lived there for the entire year as our primary home. If I choose "Delete", all of that history in Turbotax online is lost?

1 reply

Carl11_2
Employee
July 7, 2020

If you converted the rental to personal use on your 2018 tax return, it should not have been imported into your 2019 tax return, unless you told the 2019 program otherwise, by indicating you have rental property to report.

There are four things that should have been done on your 2018 tax return to correctly and completely convert the property to personal use.

 - Select that option for "i converted to personal use" on about the third screen in.

 - Work through each and every asset in the assets/depreciation section to show each asset listed as converted to personal use.

 - If you claimed "any" vehicle use (even if less than 100% business use) you have to work through the vehicle expenses section and show that vehicle as removed from the rental business for personal use.

 - THe fourth thing is to print out the two IRS Form 4562's for the property, along with the 8582. You will "NEED" these forms in the future when one of three things happens in your life.

 - You sell the property

 - You convert the property back to a rental

 - You die.

The two form 4562's I'm talking about both print in landscape format. One is titled "Depreciation and Amortization Report" and the other is "Alternative Minimum Tax Depreciation". These forms have your depreciation figures that will be needed in the future when one of the above three things occurs in your life.

The form 8582 has your suspended carry over losses that can't be deducted until you die, or sell the property in the future.

So you need to print out these three froms from your 2018 tax return and keep them "forever". They "will" be needed at some point in the future.

So if all the above is done and good, you can just delete the rental property from your 2019 tax return. If all the above was not done, then you can still delete the rental property from your 2019 tax return. But you need to amend your 2018 tax return to complete the process of converting it to personal use so that depreciation on the property is stopped and if applicable, vehicle depreciation is stopped.