ColeenD3
Expert Alumni

Investors & landlords

If your property was not held out as a rental in 2019, you can't take depreciation for 2019. If you did then you can manually add the depreciation calculated in the Rental section into Sales of Business Property.

 

However, you said that you took the lower of AB or FMV for depreciation (as you should have). IF you had a loss, again, the program would have picked up that amount properly. But, as mentioned, the depreciation has to be taken into consideration.

 

Calculating Gain/Loss on Subsequent Sale of Rental Property

If a residence converted to rental property is later sold at a gain, the basis in the converted property is the original cost or other basis plus amounts paid for capital improvements, less any depreciation taken.

 

 If the sale results in a loss, however, the starting point for basis is the lower of the property’s adjusted cost basis or FMV when it was converted from personal.

(Regs. Sec. 1.165-9(b)(2)).