@natalierose28
Section: Tell us about this Rental Asset
Cost - should this be the full cost of the property? 316,000? OR Cost minus the land portion?
Land - assuming I should take this from the tax records?
The cost of the asset is total cost of acquisition + plus cost of any improvements. This is probably the 316,000 that you paid ( House & the land underneath ).
Depreciation: Can you say more about this please? I should be paying capital gains taxes on the full amount that was depreciated? So if for example 16K was depreciated in prior years and another 4K this year then I would have to pay capital gains taxes on 20K?
For income property there is allowable depreciation over the period of usage as income property. For your case, TurboTax will compute ( or from the carry over worksheet ) the accumulated and allowable depreciation. On Schedule E you will also see an amount od depreciation based MACRS convention applicable. The sum of these two is your total depreciation for purposes of gain/ loss computation.
That portion of gain caused by depreciation ( total/accumulated ) is taxed as ordinary income -- see Schedule-D Tax worksheet. The rest of the gain is eligible for Capital tax treatment ( or exclusion when one is eligible -- the 2 + 2 rule with five year look back etc. ) .
Once you have gone past these points , go to forms mode and take a look at forms 1040- , Schedule-1, Schedule-D ( tax calculation worksheet ) and make sure that this is in sync. with what should happen.
If what you have done is just entered the sale ONLY as a sale of home ( under personal income tab ), then the sale of the property should appear ONLY once of Schedule-D. You should also see the 1040 also reflect that. Note there are two 1040 --- 1040/ 1040 SR is the enterable kind of work sheet and the 1040 it self is the final one -- not editable.
Note that when you check the sale of home / Schedule -D worksheet ( not the tax computation worksheet ) , when yolu hove over an editable entry, you should see a magnifying glass show up. Click that and it should open a back-up sheet for that entry -- here for example you can enter list your sales price and as negative all the expenses you had associated with the sales transaction ( such as commission , preparing the house for sale cost, title/deed expenses,/ transfer tax etc. etc.). This will transfer to the form correctly and will be a memory aid if you are challenged.
Does this help ? Have I answered all your questions/worries ?
