Tax Year Prior to 2020: Sold Rental Property that used to be my home

[ernielail]

So I'm using Turbo Tax to do my taxes, but it doesn't appear to be working right.

I'm in Business Income & Expenses

Rental Properties & Royalties
I hit edit on my property

Go to Sale of Property / Depreciation

Edit the asset that is my property

Click that I sold it

and once I get to Special Handling, click yes 

Now it just goes to depreciation amount and there's no where to calculate my capital gains.

Am I doing this right?

FYI

Property Purchased for 69500

Sold for 65000

Resided in it for 6 Years 

Rented for 11

I think I had around 20K in depreciation over the rental time

[VictorW9]

You should have recorded the details of the property over the years in TurboTax. Details such as the cost of the property, depreciation, improvements made to the property over the years, and all the other details will be used to calculate capital gains when you activate the sale of property routine in TurboTax.

And here's how you do this in TurboTax: 

Enter the Sale of your Rental Property in the Property Profile and the Assets/Depreciation topics in the Rental section, TurboTax calculates a Gain/Loss for you, based on Sales Price, Basis, and Depreciation (screenshot).

Here's how to enter the Sale of Rental Property:

[ernielail]

Thanks for your reply! I didn't see a screenshot attached. Could you send that over?

[ernielail]

Also, I have uploaded screenshots of what I'm seeing here...

https://lail-tech.com/taxes/TurboTax.pdf

I have circled the buttons I'm clicking in red.

[ColeenD3]

I don't see any reason for special handling. It seems to be a straight rental, unless this was a room in your personal home.

If this is the first time using TurboTax to include your rental, you will need to set up the property. This includes purchase price with land separated and any improvements you made during the time it was rented.

The only depreciation you have showing is for 2019. You may have the balance showing somewhere else.

You have to mark that you sold the property in two separate places. see the screen shot below. the first screen will also ask several questions about the property. Be sure to include the two facts that you converted from personal use and that you sold it.

[Carl]

You can stop.

and once I get to Special Handling, click yes

Why did you click yes? You sold the property,right? Read the screen to understand why I"m telling you to click NO. Then click NO and press on.

[ernielail]

I've been using turbo tax for several years, but I'm a little stumped here... Shouldn't this be special handling? I haven't always used it as a business property. I lived in it for 6-7 years and then converted it to a rental.

[ColeenD3]

No, there is no special handling. As I said, it is a straightforward rental. You do not meet any of these criteria.

[ernielail]

Okay, great! So when I enter the sale price, shouldn't I also subtract the pay off? I'm not seeing where the payoff is accounted for. Does TT do this automatically?

Or, should the payoff be a part of Sales Expenses?

[ColeenD3]

If you are referring to a mortgage pay off, it has nothing to do with the sale. It is not entered anywhere. 

Sales expenses include:

 - commissions

 - appraisal fees

 - broker's fees

 - legal fees

 - advertising fees

 - home inspection reports

 - title insurance

 - transfer taxes or fees

 - geological surveys

 - loan charges (points) or other fees paid on the buyer's behalf

Sales expenses do not include:

 - mortgage payoffs

 - home equity loan payoffs

 - rent-back costs

 - payoff to creditors

 - property taxes

 - home owner association fees