I am very confused on how to properly enter the sale of my rental property. We purchased a home in 2005, lived in it until 2011, then converted it to a rental. We sold it in August 2021. I completed all the rental sections, and was surprised Turbo Tax never asked me for information on the sale, after I told it the property had been sold. According to an answer on another thread, you need to select "edit" on the Your Property Assets screen to enter the information. I have several assets listed on that screen, but I'll return to that issue later. Clicking through, I get to a screen called "Special Handling Required?". I answered "No" to this screen even though the business use percentage questions made me think to answer yes, since I had converted to a rental during ownership. Another thread said to answer no here, so I did that to proceed, but wasn't sure if it's correct. This asset wasn't the sale of my main home, so that takes me to the Sales Information Screen. I'm confused about what to enter. My home sold for $180,000 and my total due on my closing statement was $110,434 which covered paying off the old loan, closing costs, and my pro-rated portion of the taxes to the seller. I assumed I would use these numbers for my Sales Price and Sales Expenses fields. The screen says to use divide these numbers based on fair market value. Since I did not receive a tax bill in 2021, I don't have the Village's usual breakdown to use shown on the tax bill, but there was a substantial Assessment Change done in 2021 and I have that form. The split calculates out as 12.1% for land and 87.9% for the improvement using this recent assessment so that's how I divided out the numbers. When I enter this in the dynamic Federal Refund calculated at the top swings from -$1,600 to +$2,175. I didn't think this could be right because I expected to pay capital gains on this sale and thought it would say I needed to pay in more. The land ratio back in 2011 was 26% of the total. Should I be using the same proportions as when I put it in service, or the new ones on the 2021 assessment?
What's more puzzling is my original land value when I put the property in service in 2011 was $31,353 (fair market value) and now on the 2021 assessment it's $21,500. Several screens ahead I now get a Loss on This Asset's Land screen saying I have a loss of $22,936. My land is shown as less value in 2021, but the difference is only about $10k from 2011, so I don't know where this $22,936 is coming from.
If all these steps are correct, I assume I have to do something with my other asset line items, which are a small amount of refinancing fees from 2011, and two appliances. If the above steps are correct, I have no idea what you would enter to zero those out. What would the sales price and sales expense fields be for $82 of refinancing fees, for instance? Screen shots below.
