I have turned my primary residence to a rental property and sold it in 2024. Here is the history.
1. Bought the property in 2010 for $680k
2. Rented it out in 2015. The FMV at the time was $980k, higher than purchasing price. Depreciation for tax reporting still used $680k as basis.
3. Sold the property in 2024 for $1,180k, excluding expense.
Is my taxable capital gain
(1) $1,180k - $680k = $500k, or
(2) $500k prorated with the property-renting time (9 years) to total property-owning time (14 years) = $321k or
(3) $1,180k - $980k = $200k?
If $200k, how do I input to Turbo tax to reflect FMV at the rental start time? Turbo tax asked for all information except for FMV at the rental start time. I assume if (1) or (2), Turbo tax will take care of it. Depreciation is about $130k in total and recapture is counted additionally.
Thanks for help.
