What happens to depreciation when you move back in?

Question

I purchased a home in 2006.  It was a rental property from January 2009 through November 2011.  I claimed the depreciation in 2009 and 2010, and now we have moved back into the home.  Some of that depreciation was not deductible due to my income. I understand the property is now 'retired' from rental use.  Here are the questions regarding my 2011 return:
--Do I also include depreciation from 2011?  I think so.
--Am I required to list depreciation from 2009-2011 as income this year?  I think so.
--Is this 'income' adjusted (down) for the depreciation that was disallowed in prior years?  This seems reasonable, but I don't know.
--What forms are used to document all of this?
Thanks for any help or direction you can provide.
-Scott

Steven Hamilton II · Answer

Scott,

You simply stop depreciating the home; however, you will want to keep those records until you move from the home. 
You will take depreciation in 2011.
No you are not required to list it as income this year. any recapture will be in the year in which you sell it.
Any tax loss will be taken if  you income is low enough or in a year in which your income is low enough.
Other than your use of Schedule E to report the rental income/expenses, there is nothing else you have to do until you sell the home.

-Steven the Tax Guy

Your guide to IRS laws, rules and regulations.

Steven Hamilton II · Answer

Correct, you will just pick up where you stopped.  if you do any major improvements after that point, you will want to start depreciating those separately when you rent it again.

-Steven the Tax Guy

Scott Minium · Answer

Steven,
thank you so much for your response.  Just one more question.  It is likely the house will rent again before I sell it (if and when).  So when it becomes a rental again, do I just pick up the depreciation from where I stopped?

Scott Minium · Answer

Oh, I should add that I am in the military and that I will be filing the Sched E for this property just as if I had not moved back in, excepting of course that I have to adjust for the short time I was in the house in 2011.