Enter the difference with the sales expenses. This will reduce the gain by the difference in the actual cost versus the fair market value (FMV) that was used for depreciation.
The improvements can be added as sales expense as well. This will reflect the accurate gain or loss on the sale reporting it in the appropriate sections of your tax return without taking extra steps. Keep all of your records with your tax return as your backup should you need them later.
The screenshots do look slightly different between TurboTax Online and TurboTax CD/Download, however they information requested is the same.
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