My LLC acquired land in 2021, commenced construction of a new home and sold it in 2022. How should this be reflected in TurboTax without recognizing any depreciation?

Forum|Forum|3 years ago
January 31, 2023
2 replies
17 views

The house was completed and sold on the same date. TurboTax does not appear to be set up to account for this properly.

TurboTax Online

GeorgeM777

Level 11

That depends. Was the land/home an investment property? If an investment property, then you could report the sale as a second home as follows:

Open your TurboTax account > Wages & Income
Scroll to Investment and Savings > Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other > Start or Update
Select the type of sale. If you have already entered investment sales, then select Add investments.
Enter the details of the property sold - Select Second Home from the dropdown, and continue to enter your information.
Continue to finish your sale.

The gain from the sale will be fully taxable because a second home is not eligible for the home sale exclusion. Whether you specifically select Second Home is not relevant for the tax return itself.

If you are in a business, the purpose of which is to buy land, construct houses, and then sell houses for a profit, then the facts about the sale of this home (i.e., original cost, repairs and upgrades, sales proceeds) would be entered on a Schedule C, Profit or Loss From Business. This type of gain would be characterized as ordinary income.

@crimdeller77

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"