Investors & landlords

As sale of business property, it often leads to a loss and it is allowed to offset other income. The steps to enter your sale are shown below.  

If you removed the rental activity for 2023, it should have no affect on your Sale of Business or Rental Property.  Make sure you have the full amount of depreciation used on your tax returns prior to 2023 for your entry.  Since you are using this section to sell your rental property you should definitely separate land and building.  The gain would be handled differently if the land has a gain. Use the following example to arrive at the selling price for all assets.  You can include a combined amount for the house and improvements.  If there are any assets such as appliances, they should be entered separately from the house and the land.

Use the original cost of each asset listed on depreciation, add those together then divide each one by the combined total to find the percentage of the cost for each asset.  Use that percentage times the sales price and sales expenses to find the selling price/sales expenses for each asset. (Choices would also be fair market value on the date of the sale or adjusted basis on the date of the sale, which is cost less depreciation.)

Example:  Original Cost (of each asset on your depreciation schedule)

$10,000 Land                = 13.33% 

$50,000 House              = 66.67%

$15,000 Improvements  = 20%

$75,000 Total                 = 100%

Multiply each percentage times the sales price/sales expenses to arrive at each individual sales price/sales expense.

To record your sales in TurboTax Desktop follow the steps below:

1. Open your tax return 
2. Select the Business Tab > Business Income and Expense > I'll choose what I work on
3. Scroll to Less Common Business Situations > Sale of Business Property > Start or Update
4. Click Sales of business or rental property..... > Continue > Yes > 
5. Enter your sales information (leave the depreciation amount blank)

To record the sale in TurboTax Online follow the steps below:

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 your sales information, do not make an entry for depreciation (no zeros)
   1.  Description of the Property (Second Home/Previous Rental Home)
   2. Sales Price/Sales Expenses 
   3. Date acquired and date sold
   4. Sales Price
   5. Cost
   6. Depreciation

@NavyDavey2017