Question

Second home converted to fulltime rental and then stopped renting.

Forum|Forum|6 years ago
May 9, 2020
1 reply
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We bought a second home in 2001. We decided to convert it to a fulltime rental in 2013. We decided to stop renting it at the end of May 2019 with the intent to put it on the market although we never did for various reasons. We have left the house empty except for some occasional maintenance work after we stopped renting. Would this be considered "converting from rental to personal use"?

TurboTax Home & Biz Windows

Carl11_2

Employee

Would this be considered "converting from rental to personal use"?

More than likely (but not definitely) the answer to that question would be yes. However, if you decide to rent it out again in 2020, then the answer would be no, provided the following conditions are met:

1) You actively attempt to rent it out in 2020. Weather you actually do rent it out or not doesn't matter. You just have to "ACTIVELY TRY" to rent it out.

2) You do not live in the property as your primary residence, 2nd home, vacation home or any other "personal pleasure" use during the period it is vacant between renters. Note that living in the home for a few days for convenience while you do work on it (repairs, maintenance, improvements) is *NOT* personal pleasure use and doesn't count for having lived in it while the property was vacant.

Now if you DO convert the house to personal use on the 2019 return, the date of conversion will be the day after the last tenant moved out. Then I can't stress the importance of printing the Form 4562 and the form 8582 for the property. I can guarantee you with 100% certainty that you will need both of those documents at some point in your future when one of three things happens in your life.

1) You convert the property back to a rental or *ANY OTHER TYPE OF BUSINESS USE"

2) You sell or otherwise dispose of the property so that you no longer own it.

3) You die.