Deductions & credits

Here is the way to enter the sale and account for the rental activity for the six month period.  

When you are in the rental activity for 2023, you must select the 'Assets' section, then in each asset you must go to the screen titled 'Tell Us More About This Rental Asset'. 

1. Once you reach this screen for each asset, you must select 'This item was sold, retired, stolen, destroyed, disposed of, converted to personal use....' 
2. Next enter the date you stopped using the asset for rental purposes. And answer 'Yes' you always used this asset 100% of the time for business. (The percentage of use doesn't change until after conversion from rental to personal use.)
3. Select 'Yes' for Special Handling due to 'You converted the asset to 100% personal use'.  
   • Be sure to note the amount of depreciation you deducted on all rental assets

Next you will enter a Sale of Business Property:

1. Wages & Income at the top
2. Scroll down to Other Business Situations
3. Select Sale of Business Property
4. Select Sales of business or rental property that you haven't already reported.
5. Answer 'Yes' to Do all of the following apply...?
6. Enter as description 'Inherited Rental'
7. Enter a date that will be more than one year before the sales date for the date acquired  (inherited cannot be entered in this screen)

Be prepared with the sales price, sales expenses, and the inherited cost basis (fair market value on the date of death of the person you inherited from).  See the image below.