How is rental property depreciation calculated when property switches between personal use and rental use?

What about the improvements made during personal use? Do those get added to the basis when it becomes a rental again? And does the 27.5 year schedule ever restart completely or is it always just a pause?

Yes, improvements made during personal use can be added to your basis when converting back to rental use. The key is that they must be legitimate capital improvements (not repairs or maintenance) that add value to the property, prolong its useful life, or adapt it to new uses. Make sure to document these improvements with receipts and descriptions. The 27.5-year schedule generally doesn't restart completely - it's always just paused during personal use periods. The only time you'd start a new depreciation schedule is if you sell the property and then purchase another rental property. Even if you're buying the same physical property back after selling it, that would be considered a new asset with a new depreciation schedule.

Does taxr.ai work with all the major tax software platforms? I use TurboTax and have 3 properties that have switched between rental and personal use over the years.

I'm skeptical about these tax tools... How does it actually verify the FMV? That seems subjective and I've heard horror stories about audit issues when the IRS disagrees with your property valuation.

Yes, it works with all major tax software platforms including TurboTax. You can either upload your previous returns directly or answer questions about your prior filings. It's designed to work regardless of which tax software you've been using. For FMV verification, it doesn't determine the value itself but guides you through proper documentation methods. It suggests using comparable sales data, professional appraisals, or property tax assessments to substantiate your FMV claim. This creates an audit trail that helps justify your valuation if questioned later. The tool is more about ensuring you're following the right process rather than making subjective value judgments.

Wait, they actually get you through to a real IRS person? How does that even work? I thought it was impossible to reach the IRS these days.

Sounds too good to be true honestly. I've tried calling the IRS countless times and never got through. Why would this service succeed where everyone else fails? And what's the catch - do they charge a fortune?

Yes, they connect you with an actual IRS representative. They use a system that continuously redials and navigates the phone tree for you. Once they get through, they call you and connect you directly to the IRS agent. It's completely legitimate - they just automate the frustrating part of the process. The service works because they've essentially created technology that does the waiting and redialing for you. It's not that they have special access - they're just more persistent and efficient than a human could be at navigating the IRS phone system. I was skeptical too but was desperate after trying for weeks, and it actually delivered exactly what they promised.

Does that mean I should get an official appraisal when converting back to rental? My area has appreciated a lot since I bought, so I'm thinking the FMV is higher than my adjusted basis anyway and won't be the limiting factor. But should I document the FMV somehow?

Yes, getting an appraisal is highly recommended when converting property back to rental use. Even though in your case the FMV is likely higher than the adjusted basis (meaning you'll use the adjusted basis for depreciation), having that appraisal provides valuable documentation if you're ever audited. You don't necessarily need a formal appraisal in all cases. You could use comparable sales data, a real estate agent's comparative market analysis, or even property tax assessments - but the more official the documentation, the better protection you have. Since your area has appreciated significantly, your adjusted basis will likely be the value you use, but having the FMV documented creates a clear paper trail of compliance with tax regulations.

Good point! I always forget about suspended losses. How do you track those effectively between years? Is there a specific form or worksheet?