Tax Prep by Deb Posted February 6, 2011 Report Share Posted February 6, 2011 I have a client coming in tomarrow that has a residential rental property that she recently moved into and is now her personal residence. I know ATX has a function in the Asset manager to change it to personal use, My question though has to do with recapture of depreciation. Does this happen when it is converted to personal use, or is it when she disposses (sells) the property? I've never had one of these before, so I'm not quite sure of the timing. Thanks in advance, Deb! Quote Link to comment Share on other sites More sharing options...
JRS Posted February 6, 2011 Report Share Posted February 6, 2011 I don't know if this is still current, but I had a similar situation in 2005. I used the following from the IRS as the basis for handling the conversion. (I gave the recapture amount to the client for when the house was sold. Still is a client and hasn't sold the house.) "Upon the conversion to personal use, no gain, loss, or depreciation recapture under section 1245 or section 1250 is recognized. However, the provisions of section 1245 or section 1250 apply to any disposition of the converted property by the taxpayer at a later date." Read more: http://cfr.vlex.com/vid/1-168-4-changes-use-19700700#ixzz1DDKlAUWe Quote Link to comment Share on other sites More sharing options...
joanmcq Posted February 7, 2011 Report Share Posted February 7, 2011 Its still current. No gain, loss, or recapture until the house is sold. Quote Link to comment Share on other sites More sharing options...
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