TurboTax Business 2023: Remove/Dispose of rental property to convert to personal use

Forum|Forum|1 year ago
September 12, 2024
3 replies
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I need assistance SPECIFICALLY with entries in TurboTax Business 2023. All of the information in the forums included work arounds, but I need to know if I can remove a rental property from my business, as it is now being used as a second home. The instructions online are for Home & Business, or Premier. I need to know how to make the entries correctly in TurboTax Business 2023.

The rental was effectively our second home on 1/5/2023, and prior to that was used 100% as a rental since 2021. Please advise.

TurboTax Business Windows

Anonymous_

Employee

No text available

DiannaD32Author

It is a LLC, member managed with 90% myself, and 10% Hubby ownership. The K-1's are entered into our personal returns.

Thank you for answering my initial question so quickly. That is greatly appreciated!

DiannaD32Author

Thank you for your response.

The business doesn't have any current activity; however, I am planning to keep it open as we are actively looking for a rental property. There was no "final" tax return.

"In TurboTax Business, the only option that makes sense is "This rental property was SOLD or otherwise DISPOSED of during this tax year."

None of the other options are applicable.

However, this doesn't feel conclusive or correct, but I am unable to find another way to move the property off the balance sheet.

When I search the TurboTax forums, I found these answers, but I don't know if they are correct, or how to execute within the program, if they are correct:

The Form 4797 is Disposition of Business Property, which includes the conversion to personal use. (It closes out the Schedule E for reporting). When you sell the property, you will have to account for the depreciation to determine the gain or loss (essentially it is suspended).

Thank you

Rick19744

Employee

Concur with @Anonymous_ in understanding the entity type.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

AmeliesUncle

It will be entered as the property was "distributed" from the business to you. As Tagteam mentioned, that could have adverse tax consequences if it was in a corporation.

Does this business have other activity? Or is it closed down now that the rental has been distributed to you and you need to file a "final" tax return? If it was closed down, was it closed down on 1/5/23?

[EDIT] Weird, I didn't see any of the posts after Tagteam's post until after I posted my comment.

Anonymous_

Employee

@AmeliesUncle

Me neither. I saw Rick's post but I didn't see @DiannaD32's post until you posted your response. There have been some issues with notifications lately so (????).