I don't have a schedule E on my 2020 or 2021 returns, Did I converted to personal use? want to do 1031 exchange

Forum|Forum|3 years ago
March 6, 2023
1 reply
0 views

Trying to sell a rental condo using 1031 exchange. I didn't realize I could have claimed depreciation for the 2 years it wasn't rented due to repairs and COVID. For my 2020 taxes I only show schedule E for my other rental. I think I must have chosen that it wasn't rented or available? I can't find on my turbotax forms where that question would be listed, but when I tried to amend it still didn't ask me about that property. I guess that means I changed it to personal use. NOW I want to do a 1031 exchange this year. Can I go back and undo changing it to personal use? Is it possible I chose something on my 2019 returns because it was only rented 6 months in 2019?

The other option is to edit my returns to convert it back to rental in 2021 by amending my return and skipping 2020 entirely. Do I need it to have been a rental for a certain amount of time to do the 1031 this summer.?...Any advice

TurboTax Premier Online

Carl11_2

Employee

This is a duplicate post that does not contain needed information already provided in the post at https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/property-rented-2016-2019-for-2020-21-i-just-didn-t-enter-it-now-how-do-i-claim-expenses-for-2022/01/2929478#M99043

If you rented to your child paid below FMRV, and/or if you claimed the child as a dependent, then the property is considered personal use and treated as a 2nd home. So it would not qualify for a 1031 exchange.

If the property qualifies as a rental for 2020 and on (which is possible, but doubtful), you'll have to first check your 2019 tax return to see if you converted it to personal use. If you did, then you'll need to amend the 2019 return to undo the conversion.

Then you'll need to amend the 2020 and 2021 tax return to report the rental income/expenses on SCH E for each year. When you amend those two years, you will 'NOT" be able to import the depreciation history or the PAL Carry overs, and will have to enter them manually.

Once you have amended all the returns in chronological order, you can then start your 2022 tax return and make absolutely certain you import from the "AMENDED" 2021 tax return, so the depreciation history and PAL carry overs are imported.

cindywhitallAuthor

Thank you for responding and explaining how to amend.

How do I see if I converted it to personal use in 2019 or 2020? I know I have rents claimed in 2019 but I don't see a spot where it says whether I converted or not.

My son living there is not recorded anywhere, it was meant to be short term, then covid blew up his plans to buy. He never officially changed his address. He is not a dependent.

I would have to download a tax file and desktop turbotax to amend 2019.

If it's not rented, but I did select "convert to personal use" does that mean I can't do a 1031 even though it was an investment property and not my primary home?

Carl11_2

Employee

I've looked at the PDF of my own tax return and can't find any calculation form or worksheet that indicates I converted a rental to personal use. I do know for a fact that I myself converted one of my rentals to personal use in 2018. But I can't find anything in the PDF that shows that.

I am assuming the property was placed in service before 2018.

Pull out the SCH E for both 2018 and 2019.

On that form you'll note that if you have more than one rental property, each property is assigned it's own column (A thru C) with the property for a specific column identified in PART I. (If you only have one rental property, then only column A is used.)

Look at line 18 amount under the column that is for your rental property. If those amounts are the same for 2018 and 2019, then you did not convert the property to personal use. (A few bucks difference between years is expected, and is not an indicator you converted.)

If the difference between those amounts is significant, with the 2019 depreciation amount being significantly lower, then most likely you converted the property to personal use in 2019.

You'd still need to confirm this by opening the .tax2019 file in TurboTax 2019 so you can edit that property to see if you checked the box for "I converted this property to personal use".

You need to confirm this, because if you converted it to personal use on Dec 31 of 2019, then the depreciation amounts for 2018 and 2019 could be so close that you would mistakenly think you didn't covert it.