I'm not sure where and why you're getting the question you are referring to. You should be disposing of an existing asset, and reporting proceeds and sales expenses.
If you have a depreciation report from last year, you should use that to recreate your "asset" in TurboTax. If you haven't already, set up the property as if it is a new rental property, but use the original date it was placed in service. TurboTax will calculate the accumulated depreciation based upon your entries - which need to match the original entries.
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