OK. I totally understand that I don't get any input on what the buyer does with the property after they buy it, and I am inclined to follow your advice to avoid a potential audit. I am sharing below however, the more complete text of LA Revenue Information Bulletin No. 10-017 because that is the document TurboTax referenced as the basis for this decision. Even though the buyer may choose to do what they will with the house, since it constitutes "substantially all of the assets" of the rental business for which we were using the house, I thought this deduction would apply to this sale. Here is the text:
"Louisiana Revised Statutes 47:293(9)(a)(xvii) and 47:293(10) provides an individual income tax deduction for net capital gains, limited to gains recognized and treated for federal purposes as arising from the sale or exchange of equity interests in, or substantially all of the assets of, a non-publicly traded business commercially domiciled in Louisiana.
For purposes of computing this deduction, the following terms are defined and explained:"
...and the subsection that seems to address my situation reads (in full):
"Sale or Exchange of Substantially all of the Assets of a Business - a sale or exchange of assets that would allow the buyer of the assets to continue the business. A sale or exchange of assets is presumed to be a sale or exchange of substantially all of the assets of the business if the selling business transfers at least 90% of the fair market value of the net assets and at least 70% of the fair market value of the gross assets that it held immediately before the transfer."
...and then it goes on to specify how to calculate the amount for the deduction.
If I can't deduct it, so be it but I am trying to understand where I am misreading the text. Thanks so much for all of your time on this.
