Rental Property converted to personal in 2023??

Override depreciation to zero or change method to land and leave it in the software, particularly if there are suspended passive losses associated with it.

EDIT: This what I'd do in Lacerte. Just realized this is a ProSeries question. YMMV.

If it was a rental you should not have put any personal use in January as your client would not receive the correct tax treatment, and you may ask client if they wish to amend 2023 (for one month not much of a change). Was it a rental since 2018 ?. When he moved into it in 2024, converting to personal use, then in Proseries on the asset entry worksheet under disposition, just put date of conversion and no price.

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@R B Tax wrote:

 

I believe i may have mistakenly entered the data incorrectly. In the SCH E worksheet, i entered 30 days rental and 335 days personal use and it correctly prorated interest/taxes/depreciation etc to Sch E and SCH A.

He lived in property Feb 2023 to Mar 2025 and sold property.

I'm trying to file his 2024 return but that property is still showing up as a rental.

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As Terry said, entering the 30/335 days was wrong (you should have entered zero personal days, then manually prorated the annual expenses, and only entered other expenses, such as utilities, etc., that applied to the rental period), but the results may have been fairly close compared to doing it the right way, so it may not be worth fixing.

If you are using the $250,000/$500,000 Principal Residence exclusion, be sure to fill out the section of the Home Sale worksheet for "Nonqualified Use".  Just because they lived there for the last two years does NOT mean they can exclude the entire gain.

You can just delete the Schedule E Rental Worksheet, and it will get rid of that.  But BEFORE you do that, (1) print out the depreciation report, so you know the total amount of depreciation that was taken, and (2) check if there are any unused Passive Loss Carryovers from Form 8582.

• If there were any unused Passive Loss Carryovers, first check if there was any passive income on the 2024 return that the carryover losses could be used against; if there are, you may need to keep the Schedule E on there so ProSeries can use those carryovers (you can still delete the Asset Entry Worksheets).  You may need to re-enter the rental property (but not the Asset Entry Worksheets) on the 2025 return in order to trigger the use of the carryovers due to the sale.