Carl
Level 15

Investors & landlords

In 2019, we did not rent the house or try to rent it,.......TT deleted the home as a rental property 

Bad programming on TurboTax's part. Extremely bad. Bottom line is, the absolute only way to be 100% certain you report things correctly, is to clear your 2019 tax return and start over from scratch. That is the only way possible to re-import all the data from the 2018 tax file. But since your divorce was finalized in 2019, that creates a completely new problem in that you flat out can not report the sale in the "sale of rental property" section anway. But it's perfectly doable if you know what you're doing.

After you start your 2019 tax return over from the start and reimport all the 2018 data, work through the rental property and do "NOT" indicate you sold it. Instead, show that you converted it to personal use on 1/1/2019. You have to work through each individual asset one at a time.

When asked "did you stop using this asset in 2019?" select YES. Then on the "Special Handling Required?" screen, select YES. (If you select NO, then you are FORCED to enter sales information here. You can't report the sale here because the program has no way possible of allocating half of everything to you.)

As you work through each asset, write down for each individual asset, the cost, prior year's depreciation and current year's depreciation (if any for the current year).

Once you've done this for all assets listed, finish working through the rest of the screens for the rental property. Then add up all your cost basis amounts for your total cost. Then add up all the depreciation amounts (prior and current year) for the total depreication taken. Then divide those answers by two and you'll report the sale of your half.

You will report this sale in the "sale of business property" section. Just work it through remembering you only get half the cost basis, and half the total depreciation taken.

Also be aware that by law, you are required to provide your ex spouse there share of the cost basis and their chare of the depreciation they get credit for.