I sold a rental property in June 2019 that was vacant the entire period prior to the sale. The property was advertised For Rent and For Sale though we found a buyer first. While preparing my 2019 return, I did not report any rent activity under the Rent and royalty Summary section and reported the sale under Business Items, Sale of Business, and deleted the property from the Rent and Royalty. Did I do this correctly? Since I deleted the property and did not report any rental activity activity in 2019, there was no depreciation calculated for 2019.
After completing my return, I received feedback that I should have treated the property as a rental property prior to the sale, then report the sale under Business Items, Sale of Business Property. Is this correct? If so, can I re-add the property to the Rent and Royalty Summary and can I import all prior years data (i.e. cost basis, and depreciation)? For the six months the property was vacant I still had expenses to pay; utilities, insurance, etc which I understand are not a deductible expense when selling the property.
