RobertB4444
Expert Alumni

Deductions & credits

What you should have done when you started renting it in 2016 was create two assets - one for the house and one for the land.  I usually recommend that the value of the land be about 20% of the total.  Then, when you set up the depreciation. the portion of the property that is the land would not depreciate and you would only depreciate the portion that was the building.

 

If you only created one asset at the time that you started depreciating the property then you don't have to think about the land at all.  Just do the sale and you'll recapture the depreciation and pay long term gains on your profit.

 

If you did create two assets then you split the sales price along the same percentage lines that you split the original cost.  Enter it as a sale of two assets and you're good to go.

 

@mhashimoto10 

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