Carl
Level 15

Investors & landlords

Based on my understanding of this thread (and I'm not 100% confident I understand it correctly) you can not report your sale in the SCH E section of the program, since your depreciation value was less than what you originally paid for the property. What you have to do in the SCH E section is show the property and each individual asset in the assets/depreciation section as converted to personal use on the closing date of the sale (or before that date if applicable).

Then you will report your sale in the section for "sale of business property". When asked what you paid for it, you can enter what you "really" paid for it, plus the cost of any property improvements if any were done under your ownership.

When asked for the total of all depreciation taken, you must enter the "higher" of the depreciation actually taken, or the total depreciation you "should" have taken during the period of time from when you converted it to a rental, until you converted it back to personal use.