@Mike9241 wrote:example. You buy property for $1,000,000, allocating $800,000 to building and $200,000 to land. You sell for $1,500,000 and list the entire sales proceeds on the building. Let's also assume depreciation on the building was $100,000. Your gain is is $600.000, but because no sales proceeds were allocated to the land. TutboTax thinks you just sold only the building for $1.5M, resulting in am $800K gain [$1,5M - ($800K - $100K) ]
That hypothetical is based on having entered a basis for the land previously in TurboTax.
Again, provided the correct sales price, basis, and accumulated depreciation are entered, the program will make the correct calculations in terms of capital gain and Section 1250 recapture. The key here is that ONE piece of property is being sold, not just the building or the land. They don't need to be separated as long as the figures are entered correctly.
