Yes. Cost is the original value of the property when originally purchased (unless the cost was more than the FMV at time of conversion, then you use the FMV). Land portion would be listed separately.
If you are trying to claim the home gain exclusion on this converted rental property, you will need to get all the rental assets to report no gain or loss (you may have to manipulate the sales amounts to get these assets to have no gain or loss). You will then take all prior depreciation (this amount will be generated by TurboTax if you used TurboTax for the entire time this was a rental) and the current year depreciation and add these amounts to get a total for depreciation on this rental.
Now you will need to enter this information under the sale of home section. If you meet the home gain exclusion, the only amount that you will have to pay any capital gains tax on is the recapture of depreciation from the time you used the property as a rental (referred to as a Section 1250 recapture amount). (Remember the IRS will assume that you claimed the correct amount of depreciation every year—this is true regardless of whether you actually claimed any depreciation on your tax return).
To enter the sale of your home in TurboTax Online or Desktop, please follow these steps:
1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
3. Next click on “I’ll choose what I work on”
4. Scroll down the screen until to come to the section “Less Common Income”
5. Choose “Sale of Home (gain or loss)” and select “start’
6. You will want to use the "Easy Guide" to determine the adjusted basis on this home
Say "yes" that you sold your main home and TurboTax will guide you on entering this information. You will need:
• The date you sold your home and the selling price (from your closing statement)
• The date you bought your home and the purchase price (from your closing statement)
• The cost of any major improvements you made, so we can deduct them for you
• Form 1099-C if you sold your home at a loss (short sale)
