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Investors & landlords
@Tzoto wrote:
1. When I sell the rental property, am I correct to assume that Turbo tax will calculate properly the tax on the gain including recapturing depreciation in the two assets (my old half and my husband 1/2 stepped up) when I report the Property as sold?
2. Do I need to do anything regarding stepped up basis on my Primary Residence? If yes, how do I report it in TT? If not now, how do I deal with it when I sell it? I dont plan to sell it for quite some time, but I am afraid that by the time I sell it, I will be over the $250K tax exclusion.
1) Yes ... but it won't be particularly easy. You would need to either (a) allocate the sales price between the various assets, or (2) report it in a different section of the program. Neither walks you through it like most of the rest of TurboTax does. You can definatly do it, but it might be a situation that you might consider a tax professional.
2) No you don't need to do anything in TurboTax in regards to your personal residence. However, make sure you keep a permeant record of "step up" value for when it is sold. An official "appraisal" is the best option.