To clarify, Form 4562 is used to report depreciation and amortization.
For a rental property sale, most closing costs, such as legal fees, title insurance, and transfer taxes, will reduce your gain on Form 4797.
When you sell your rental property, follow the steps to report the sale found here: I sold my rental property. How do I report that?, with the selling expenses you asked about being reported in step 10:
"To report the sale of your rental property, follow the steps below:
- Go to the rentals section
- Answer Yes to the question Did you have any income from rentals or royalties?
- On the Your rentals and royalties summary page, select Edit (pencil icon) beside the property you sold.
- Select Edit (pencil icon) next to Rental property info.
- Under General info, select Edit under Situations (or on the page Tell us about your situation this year), then select Sold or disposed of property.
- Continue through the screens until you return to the Here's your rental property info screen.
- Select Edit next to Sold rental property or Sale of property/depreciation.
- Go directly to your asset summary and select Edit beside the first rental asset you sold.
- Continue to the page Tell Us More About This Rental Asset and check the box for The item was sold... Enter the date of the sale in the pop-up box.
- Follow the prompts to enter the sale information, including the sales price and selling expenses you calculated.
- Continue back to the Rental Asset list.
- Repeat steps 9-11 for each rental asset.
- Continue back to the Property Summary page. Select Done/Continue and answer any follow-up questions."
