First of all, Turbo Tax Premier would be the best program to enter this information. Home and Business is fine but Turbo Tax Premier is less expensive and if you properly enter this, all the correct forms will be generated into the return, which includes the 4797 and 8949. Now to enter this properly, including the sale.
- In TurboTax, go to federal>wages and income>see all income>Rentals, Royalties, and Farm>Rental Properties and Royalties (Sch E)>start or revisit
- Answer Yes to the question Did you have any rental or royalty income and expenses in 2022 for property you own?
- Follow the on-screen instructions as you proceed through the rental and royalties section.
- We'll ask you to enter general information about your rental (like description, address, and ownership percentage)
- You will eventually reach a screen that says Do Any of These Situations Apply to This Property? here is where you indicate you sold the property. Then you will enter information about how long it was rented .
- Eventually, you'll come to the Rental Summary>sale of property/depreciation. screen, which is where you enter your rental income and expenses, assets and depreciation, and vehicle expenses. This determines what will be reported on the 8949 as well as the 4797. You do not generate these on your own.
- As far as your business use percentage throughout the years, you would not report this separately. This is determined by the amount of depreciation taken throughout the years, based on your business use percentage. If you reported your rental income and expenses previously with Turbo Tax, then Turbo Tax should have a record of your depreciation taken for every year you reported this as a rental activity. Hopefully, you have kept a record of all depreciation taken because if your record deviates from the actual depreciation taken, you have a chance to correct this amount in the program.
This is important because the depreciation needs to be recaptured to report on a 8949 (program does this automatically).
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