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Updated almost 8 years ago on .
Rental converted to Personal, how to handle HVAC
Lived in house from approx 2000 to 7/2014 at which time i rented it out. In Late 2015, i had to buy a new HVAC which meant that in addition to depreciating my house, i started depreciating my HVAC on a 27.5 year schedule. in 4/2016, renters moved out and I moved back in 9/2016 after unsuccessfully being able to rent it. I understand that ultimately when i sell it, depending on how long i stay i may be able to get a cap gain tax prorated on number of qualified years, and that i would need to recapture depreciation already taken. How do i handle my 2016 taxes - specifically for the HVAC? I think i just take the pro-rated 8 months of depreciation in 2016 (for both actually) but when using one of the automated web services to do my taxes, i get a warning talking about net gain or loss Form 8829 , referring me to 8549, and form 4797. As I understand it, i put the gain or loss amount as 0 for converting the hvac to personal use...and then when i sell the house, although i would qualify to lower my basis by the 5k it cost me to install it, i would have to go back and recapture the deprciation for the hvac as well. THoughts?