how do i list the sale of a depreciable asset?

[CatinaT1]

Reporting the sale of a depreciable asset (like a vehicle, equipment, or rental property) requires you  to "recapture" the depreciation you claimed in previous years.

Instead of going directly to a "Sales" section, you must go through the Assets/Depreciation area of your business or rental profile.

Depending on what the asset was used for, follow one of these paths:

Business Asset (Schedule C): Go to Wages & Income > Self-Employment > Expenses > Assets/Depreciation.

Rental Asset (Schedule E): Go to Wages & Income > Rental Properties and Royalties > Assets/Depreciation.

Once you are in the Asset Summary list:

• Click Edit next to the specific asset you sold.
• Proceed through the screens until you see the question: "Did you stop using this asset in 2025?" Select Yes.
• Enter the Date of Sale.
• Enter Sales Information: TurboTax will ask for the Sales Price and Sales Expenses (like commissions or legal fees).

Multiple Assets in One Transaction:  If you sold multiple assets in one transaction (like a house, a new HVAC system, and a refrigerator), you should allocate the total sales price among them based on their relative value.

Special Handling for Land: If you sold a rental property, you must split the sales price/sales expenses between the Building and the Land. Since land isn't depreciable, TurboTax handles that gain separately from the building's depreciation recapture.

When you sell a depreciable asset, TurboTax generates Form 4797 (Sales of Business Property). Here is how that completed form will look:

• Depreciation Recapture: If you sell the asset for more than its "Adjusted Basis" (Original Cost - Depreciation), the portion of the gain that comes from the depreciation you took is taxed at ordinary income rates.
• Capital Gain: Any profit above your original purchase price is typically taxed at the lower Long-Term Capital Gains rate (0%, 15%, or 20%).
• Ordinary Loss: If you sell the asset for a loss, it is usually treated as an "Ordinary Loss," which can offset your regular income without the $3,000 limit that applies to stocks.

[yianni-alexander]

so i went to the section where the asset is listed, it is showing the depreciation carried over from previous years, and then i went to edit it, but it never asked me the question "Did you stop using this asset in 2025?"

[ThomasM125]

When you update the asset entry, you should see a screen that says Tell us more about this asset and the response you should choose is this item was sold, retired, stolen, etc... There are several responses available on that screen, you may have missed the one I mentioned. Once you choose that response you will be asked to enter the date sold and later you will be prompted to enter the sales proceeds to process the sale of the asset properly.