Lived in home 1985- 2000: rented 2000-2014: not rented 2015-2018- improvements made, sold April 2018. How do I claim the sale of this home?

Purchased in 1985 for 60,000. refinanced in 2000 for 110.000. Depreciated during rental years & no longer claimed as rental 2015-2018 while improvements were being made. Sold for 305,000. (gross proceeds on 1099 S) How do we report sale since it is no longer a rental? How do we figure the cost basis and what can we claim as far as improvements?

Thank you.

JulieR
Expert Alumni

Investors & landlords

You will report the sale of this as a second home.  To do this, type "second home, sale" into the search box and click the "Jump to" link in the search results. Follow the program prompts until you reach the "Choose the type of investment you sold" screen then choose "Second Home" (see screenshot below)

Related to cost basis of your home - The adjusted basis of property is usually the original cost of the property adjusted for various items after you acquired it. 

Adjusted basis includes: 

  • original cost, including sales tax, purchase expenses, commissions, etc. (from the original closing statement, if available)
  • permanent home improvements (examples include flooring, roofing, HVAC systems, kitchen remodels, etc)
  • nondeductible assessments for improvements (sidewalks, utilities, etc.)
  • depreciation claimed or allowable (if you had an office in your home or rented the home)
  • casualty and theft losses deducted 

For more details, including a more complete list of additions and deductions to your basis, see IRS Publication 523, Selling Your Home.

Please comment if you need additional help with this.

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