owner occupied 2 family

[mcd1231]

My client purchased a 2 family home in 2007.  She occupied Unit #1 with her 2 children and grandchildren.  Unit 2 was a used as a rental unit on Sch E.  In January 2020 tenants moved out of the rental unit and one of her children moved into the the former rental unit with her children. She does not pay rent.  So I can no longer use Sch E for this property since it is no longer a rental.

  How do I get Sch E to stop showing a rental loss due to depreciation? 

[Just-Lisa-Now- · Accepted solution]

Asset entry worksheet for the rental, scroll down to the disposal section and enter the date the tenants moved out, dont enter a sales price, just the date, that stops the depreciation as of that date.

[rbynaker]

Enter a sale date for all of the rental assets (sounds like some time in Jan 2020) but do not enter a sale price.

[mcd1231]

Good morning:

I did that and it is taking a $300 depreciation deduction for one day.  I put in 1/1/2020 as the disposition date.  Should I let it go or make an adjustment for it on the other income line on the 1040?

Thank you in advance.

[rbynaker]

You said they moved out in January.  If it was in service as a rental for at least one day in January you get a half-month's depreciation (or half-year on assets with shorter lives).  If it stopped being a rental in December then technically you should amend the prior year return and reduce the December depreciation by 1/2 month.