Use the sale under the rental activity. In 2016, you used this property 100% of the time for business before the sale, TurboTax will then handle the depreciation based on the sales date, and carry the gain to the appropriate place, taxed at the appropriate rate. The steps below will take you through the property sold.
If there is gain that is more than the amount of depreciation previously used there should be some capital gain treatment maxed at 25%. It goes from the Form 4797 to the Schedule D and the land would follow this path as well.
TurboTax will walk you through the sale and report it correctly. For this reason I will provide the steps to follow to make sure the entry is completed correctly.
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In TurboTax Premier desktop or online:
- Federal Taxes tab
- Wages & Income
- Rental Income
- Check that it was sold in 2016 on the situation page
- Step through the screens -
- answer yes it was rented all year, then no to you didn't own it all year for the property sold)
- Enter the number of days it was rented before sale
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Follow the prompts to complete your entry
- View the screenshots attached for assistance by clicking on each one
