Investors & landlords
If you stopped renting and sold the home in the same year, you can enter the Sale Info under Assets/Depreciation in the Rental section.
If there was a period of time between when you stopped renting and the sale (into the next year), you can mark the rental 'converted to personal use' in the Rental section and then enter the sale in the Sale of Business Property section later. This will stop the Schedule E depreciation as of the disposition date.
You should come out with the same amount of Capital Gain either way. If you made Improvements to the home after you stopped renting, before selling, you can enter them as an Asset in the Rental section, (which is also sold, so adds to Cost Basis). In the Sale of Business Property section, you would add the amount of improvements to the original Cost Basis, still subtracting the required depreciation amount in either case.
Sales Costs are also added with either method. Depreciation taken (recapture) is what usually causes the capital gain and TurboTax calculates and displays that amount for you when you indicate you have sold the property in the Asset/Depreciation section . Check your Form 4562 and add Prior and Current Depreciation amounts together if entering in Sale of Business Property.
Be sure you indicate that you 'rented for all of 2023', which means up to the sale date, and that Business Use was 100% after placed in service. When asked if 'Special Handling Required' say NO, and you'll get the screen to add Sales Costs.
You can review all the sales calculations on the Asset Entry Worksheet for the property. Look for the Original Cost, the Depreciation taken, the Depreciable Basis, and the Disposition with sales proceeds.
