If you're really stuck, you can also log back into your H&R Block account and look at the actual depreciation schedule they created last year. Sometimes it's easier to see it there than on the actual tax forms. Go to your account, look at last year's return, and there should be a section for "Depreciation Worksheets" or something similar that shows a breakdown year by year. Just FYI - I found FreeTaxUSA's rental property section to be pretty good once you get past this initial hurdle of entering the prior year stuff. Much more straightforward than H&R Block in many ways!

I switched from TurboTax to FreeTaxUSA last year and ran into the exact same issue with my rental property! One thing that helped me was to look at the actual depreciation worksheet that H&R Block generated, not just the forms. When you log into your H&R Block account, there should be a detailed depreciation schedule that shows the breakdown year by year - this made it crystal clear what the cumulative amount was. Also, double-check that you're looking at the right property if you have multiple rentals. I almost entered the wrong depreciation amount because I was looking at the wrong property's line on my Schedule E. The Form 4562 Box 22 that others mentioned is definitely the right place to look for the cumulative prior-year depreciation amount. FreeTaxUSA's interface for rental properties is actually pretty intuitive once you get past this initial setup. Good luck with the switch - you'll definitely save money compared to H&R Block's fees!

Has anyone had the IRS apply their overpayment to a state tax debt? I heard they can do that but not sure if its automatic or if you have to request it?

I went through something very similar last year with back taxes from 2021. The IRS will definitely refund any overpayment automatically - no special forms needed. What helped me was creating an online account at irs.gov so I could track the status of my payment and see exactly how they calculated the penalties and interest. One thing to keep in mind: if you made the payment recently, it can take up to 6-8 weeks for them to fully process everything and issue the refund. They have to apply your payment, calculate the exact amount owed as of the payment date, and then process the overpayment. You should receive a notice explaining their calculations before the refund arrives. Also, double-check that you don't have any other outstanding federal debts (like student loans) because they might offset your refund against those before sending you the money. Good luck!

been checking my transcript every day for 3 months straight... we're all in the same boat fam 😭

I've been through this exact same thing! My as of date bounced around for weeks before anything actually happened. From what I've learned lurking here, it could mean they're processing something but it's definitely not a guarantee. The waiting game is absolutely brutal - I feel you on the anxiety! Have you noticed any new transaction codes appearing on your transcript? Those tend to be more telling than the as of date changes.

I'm wondering if it matters that the OP only made $13.5k as a substitute teacher? Isn't that below the filing threshold anyway? Maybe they wouldn't have owed taxes regardless of this fake business?

This is absolutely tax fraud, and you need to act quickly to protect yourself. The fact that the preparer was so casual about creating a fictional business shows this isn't their first time doing something like this - which is terrifying. Here's your immediate action plan: First, file Form 1040-X (amended return) to remove the fake business loss. Even if you end up owing some taxes, it's infinitely better than having fraudulent information on your return. Second, report this preparer using Form 14157 and consider contacting your state's tax preparer licensing board if they have one. The good news is that with only $13,500 in income, you're likely under the standard deduction anyway, so you probably won't owe much (if anything) once you remove the fake business. But don't wait - the longer fraudulent information stays on your return, the worse it looks if the IRS discovers it during an audit. Document everything - save copies of your original return, any communications with the preparer, and notes about what happened. This will help if you need to prove you weren't complicit in the fraud. The preparer's casual attitude about this suggests they've done it before and will do it again to other unsuspecting clients.

This is exactly the situation I've been dreading dealing with! I have a contractor van that I've been depreciating for about 6 years, and I'm finally ready to bite the bullet and figure out the conversion process. Reading through all these experiences has been so helpful - especially the points about business modifications affecting FMV and the importance of timing. My van has ladder racks, commercial shelving, and heavy-duty floor protection that would definitely need to be factored into any personal use valuation. One question I haven't seen addressed yet: how do you handle partial year depreciation in the year of conversion? If I convert mid-year, do I need to take depreciation for the business use portion of the year up until the conversion date? And does that affect the basis calculation for determining recapture? Also, for those who used multiple FMV sources, did you average them or use the most conservative estimate? I'm trying to figure out the best approach to avoid any issues while still being fair about the actual value. Thanks to everyone who has shared their experiences - this thread has given me the confidence to finally tackle this instead of putting it off another year!

This has been such a comprehensive discussion - thank you to everyone who shared their real-world experiences! As a tax preparer, I see this issue come up frequently and wanted to add a few professional observations. One thing I always recommend to clients in this situation is to create a "conversion file" with all your documentation dated the same day you make the conversion official. This should include: photos of the vehicle showing condition and business modifications, your FMV research/quotes, insurance change confirmation, and a written statement of your conversion date and reasoning. For those asking about FMV documentation, I've found that a combination approach works best: use online valuation tools as a starting point, but then adjust downward for business modifications, excessive wear, and local market conditions. Document each adjustment with photos or estimates. The IRS is generally reasonable if you can show your work. Also, don't forget that this conversion might affect your state taxes differently than federal - some states have their own depreciation recapture rules or don't conform to federal treatment. Worth checking with a local professional if the amounts are significant. The timing flexibility mentioned earlier is crucial - you have control over when this happens, so plan it for a tax year when you can best handle the additional income. Great thread overall!