Do I need to do Section 179 for depreciation recapture? What date should I use for disposition of rental property when I had personal use before listing for sale?

wrl · ‎June 6, 2019

Bought rental house for daughter and her friend 1/22/16 ... FMV rent from then until 4/30/17. Daughter died 4/8/17. Allowed friend to rent for 3 months, 5/1 - 7/31/17, at 1/2 previous rent. House for sale 8/1/17, sold on 12/8/17. I never lived in the house myself, but it seems I need to classify 5/1 - 7/31 as "Personal Use". I also did TT depreciation for 2016.

In doing the "Sale of Property" in the Business section of TT, I seem to be directed to enter the date of conversion to Personal Use instead of the actual sales date. When I do this, I have a hard time figuring out how to enter the sales information for capital gain, etc.

CathiM · ‎June 6, 2019

If you use the conversion to personal use option, TurboTax will take care of the depreciation recapture at the date of the conversion. You can use 04/30/17 as conversion date. You can then enter the sale as a sale of investment (second home). I am terribly sorry for your loss.

Here is how you enter the sale for investment property:

Open your return in TurboTax.

(To do this, sign in to TurboTax and select Take me to my return button.)
In the search box, search for sold second home (use this exact phrase) and then select the "Jump to" link in the search results.
Answer Yes on the Did You Sell Any Investments in 2017? screen.

If you land on the Here's the investment sales info we have so far screen, select Add More Sales.

Answer No to the 1099-B question.
On the next screen, select Second Home (choose this also for inherited homes) or Land. Select Continue.
Follow the on-screen instructions to completion.

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wrl · ‎June 6, 2019

Thank you, TTCathi!

Do I need to do Section 179 for depreciation recapture? What date should I use for disposition of rental property when I had personal use before listing for sale?

Investors & landlords

Investors & landlords