If the last person to move out of the property prior to the sale was a paying rental tenant, you will report the sale in the Rental & Royalty Income (SCH E) section of the program.
If you stopped your depreciation before making the improvements, then enter the information in the Sale of Asset section.
This is not correct. All property improvements will be entered in the Assets/Depreciation section of the program under the Rental & Royalty Income (SCH E) heading. If the property improvement was done after the last renter moved out, then the business use percentage will be ZERO percent. It's in service date will be the date the work was completed and *AVAILABLE* for use. Just because it's available, doesn't mean you actually used it. Hence, the business use percentage is zero percent. This way the asset is not depreciated since it was never actually used, yet it still adds to the cost basis of the property.
