Rental property converted to primary residence in 2021. TurboTax still including a Schedule E for 2022, but error says # of days s/b more than 15.

Forum|Forum|3 years ago
March 24, 2023
3 replies
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I converted my rental property back to primary residence in 2021, after renting out for 4 years. Was primary residence for all of 2022. TurboTax created a Schedule E for the property, maybe because of the Passive Loss Carryover, but then is giving me an error that the Days Rented must be greater than or equal to 15 to use this schedule. Do I need this schedule to file? If not, how do I remove it? If I do need it, is there a way to mitigate this error?

TurboTax Online

Mike9241

you have to delete schedule E but you must keep track of the property's cost and depreciation taken and disallowed passive losses.

j_koewlerAuthor

thank you!

AmyC

Employee

One step at a time:

In your 2021 return, you should have marked that you converted the property to personal use for the program to calculate rental vs personal portion. If not, do you need to amend the prior year? See: how to file an amended return.

You will want to view/ print the Sch E and all associated forms, depreciation, carryover, etc. Save these forms via download or print for future reference.

Then you can delete the Sch E and it will eliminate all associated forms. The program will no longer contain the information.

1. Not needed

2. How to delete: select the trashcan or delete option rather than edit.

3. n/a

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j_koewlerAuthor

thank you! Yes, I did convert it to personal use in my 2021 return.

Carl11_2

Employee

Before you delete anything, you need a few documents from your 2021 tax return.

There are two form 4562's that both print in landscape format. One is titled "Depreciation and Amortization Report" and the other is "Alternative Minimum Tax Report" Print them both, as you will need them at some time in the future. These show your total depreciation taken on the property while it was a rental, up to the date you converted it to personal use.

The other form you need from your 2021 tax return is IRS Form 8582-Passive Activity Loss Limitations. This shows any PAL carry overs you may have. If you don't have form 8582 in the 2021 tax return, that just means you don't have any carry over losses. Due to changes in the tax law in 2018, it's perfectly possible you won't have any carry overs, and therefore the 8582 will not be present.

You will need these forms when one of three things happens in your future.

1) You convert the property back to a rental or any other type of business use (such as claiming a home office)

2) You sell the property.

3) You die.

File these documents with your paperwork that you received when you originally purchased/acquired the property, so they will be available when needed.