@omarhass said "I have a follow-up question about how to report the sale price of the rental property that was rented only for a fraction of the time that I owned it. For example, it was rented for about 78% of the time that I owned it. The rest of the time my kids lived in it."
Q. So should the reported sale price be multiplied by 78%(.78)?
A. No. The entire (100%) capital gain is taxable. You have a 2nd home (your relatives used it after being a rental). The sale of a 2nd home (personal use property) is taxed as a capital gain at the same tax rate as the sale of rental property. Unlike the sale of your primary home, there is no special tax treatment for the sale of a 2nd home. In addition, you need to recapture the depreciation claimed (or allowed) during the rental period.
You need to enter it as the sale of "business property".
In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in Home & Business)
- Wages & Income
Scroll down to:
- Business Items
- Sale of Business Property
