Cbird3
Returning Member

Rental Home Sale

Can I get help in determining how much money I'll need to set aside for the sale of a rental property.  Home was purchased in 2002.  We lived there until 2013 and then converted it into a rental property for seven years.  House is being sold this month.  Purchased for 180,000.00  Selling for 312,000.00.

Investors & landlords

You don't give anywhere enough info to possibly do even a rough guess ... so if you used the downloaded program last year YOU  have the ability to what if to your heart's delight ...  hopefully you have taken depreciation as required all these years ... if you have not then RUN to a local professional to get the 2020 filed correctly and get the error fixed. 

 

https://ttlc.intuit.com/questions/1933977-i-sold-my-rental-property-how-do-i-report-that?jump_to=ans...

 

 

This is my mini version of  a tutorial  that should be in the downloaded program: 

 

Always remember to shut off the auto update function once you have filed your returns and do not do any updates unless you have safeguarded the PDF & .taxfiles to a removable storage unit for safekeeping.

 

 

What is Forms Mode?

Forms Mode lets you view and make changes to your tax forms "behind the scenes."

If you're adventurous, you can even prepare your return in Forms Mode, but we don't recommend it. You may miss obscure credits and deductions you qualify for, and you may forget to report things that will come back and haunt you later.

Forms Mode is exclusively available in the TurboTax CD/Download software. It is not available in TurboTax Online.

                  

Related Information:

                             

If you want to play around with different figures and tax scenarios without affecting your original return you can ….

  • >>>In the TurboTax CD/Download software by creating a test copy
  • 1.  Open your return in TurboTax. 
  • 2.  From the File menu, choose Save As. 
  • 3.  Give the copy a new name to distinguish it from the original (for example, by adding "Test" or "Example" to the file name). 
  • 4. Click  Save. You are now safely working in the test copy and anything you do here will not affect the original. 
  •  https://ttlc.intuit.com/questions/1900642-how-to-make-a-test-copy-of-your-return

           

  • >>  use the WHAT IF tool: 
  • - Click Forms Icon (upper right of screen) or Ctrl 2 (forms view) 
  • - Click on the Open Form Icon 
  • - In the “Type a form name.” area type What-If (with the dash), click on the name of the worksheet - click on Open Form 
  • - You will see the worksheet on the right side of the screen; enter the information right into the form 
  • - To get back to interview mode - click on the Step-by-Step Icon (upper right of screen) or Ctrl 1

 

 

It's always a good idea to make a backup copy of your tax data file, in case your original gets lost or corrupted. Here's how:

  1. From the File menu in the upper-left corner of TurboTax, choose Save As (Windows) or Save (Mac).
  2. Browse to where you want to save your backup.
    • Tip: If you're saving to a portable device, save it to your computer first to prevent data corruption. Then, after completing Step 4, copy or move the backup file to your device.
  3. In the File name field, enter a name that will distinguish it from the original tax file (for example, add "Backup" or "Copy" to the file name)
  4. Click Save and then close TurboTax.
  5. Restart TurboTax and open the backup copy to make sure it's not corrupted. If you get an error, delete the backup and repeat these steps.

If you make changes to your original tax return file, repeat these steps to ensure your original and backup copies are in-synch.

Related Information:                             

 

AND save it as a PDF so you have access to a copy even if you don’t have the program still installed and operational :

AND protect the files :

 

Anonymous
Not applicable

Investors & landlords

as an extremely rough estimate

your gain is the $312K less the $180K + the depreciation you took or should have taken 

say that's $30K so your gain is $162 k of which the $30K will be tax at about 25% and $132k will be tax at about 20%

 

if you made capital improvements from the date of purchase that would increase your basis and reduce the gain. if made these improvements should have been depreciated along with the original cost (less the amount that should have been allocated to land) 

your other income for the year of sale could greatly affect the above estimate 

for ex

 

Cbird3
Returning Member

Investors & landlords

Thank you so much for responding back to me on this.  Here's some additional information that may help.

- I'm looking that the HUD statement for when I purchased the home and I paid a total of 8208.01 in closing costs. 

- When I sell the home the HUD statement says I'll be paying $20.500.00 in closing costs.

- I lived in the home from 9/2002 until 7/2013.  During that time I made a lot of upgrades to the home.  Which I have kept the receipts for.  The total of those upgrades before converting it into a rental property $32,000.

- According to my 2018 return filing jointly are income was $152,813

- According to my 2019 return filing jointly are income was $168,319

- The depriciation schedule shows the following:

2014:$3997.00

2015:$5642.00,

2016:$5642.00

2017:$5642.00

2018:$5642.00

2019:$5642.00

Anonymous
Not applicable

Investors & landlords

the closing costs you said you paid (I'm assuming they are actually closing costs and don't include any amounts which were or are either not deductible - like a deposit to and/or redemption of a real estate tax escrow account or should have been or will be deductible such as proration of real estate taxes upon purchase and sale) total about $30K which reduce your gain so does the amounts paid for improvements.  you can now figure your gain  - purchase price + costs of improvements + closing costs on purchase  - depreciation that is the larger of allowed or allowable (if you took too much that's what you use. if you took too little you have to compute what you should have taken and that's what you use - see a pro in this case because you have a tax issue that TT can't really help you with) = basis

sales price - closing costs on sale = net selling price

net selling price - basis = gain  

gain - depreciation (again the larger of allowed or allowable)  = portion eligible for capital gain treatment.