TaxMonkey
Level 8

Conversion to personal property is treated as a disposition with no gain recognition.


When converting again to rental use you will use the lower of FMV or adjusted basis - almost always in this situation it will be the adjusted basis, with a class life of 27.5 yr (residential rental).  Make sure to track the previous depreciation as it will be subject to unrecaptured s1250 gain on disposition. 

View solution in original post

0 Cheers