Investors & landlords

Is turboTax supposed to grab that information for cost basis?

In a sense, yes. But one asset at a time.

Do I need to "sell" each item tied to the property?

To further clarify, you report the sale of each individual asset listed in the Assets/Depreciation section.

Does the ratio of land to property remain the same as originally layout when purchased?

Yes and no. The ratio on the "original" asset entry, which is the actual property/land itself, never changes. Not ever.  No exceptions. Any additional assets listed have no land value, assuming they are not land improvements. If any additional assets listed are land improvements, they're not depreciated and that "will" change the ratio. But if you report the sale correctly in the program using the guidance below, the program will take care of all this "for you".

If I mad sales costs related only to the building to they still get split over the land expenses also?

Again, yes and no.  If upon your initial purchase/acquisition of the property you show a single asset with the total cost/value of that asset in the COST box, and then you entered an amount in the COST OF LAND box, the sale of that asset is treated as a *single* asset and you have to split your sales price of that asset between the structure and the land. This is most common.

If you entered two physically separate assets with one for the structure and another for the land then you're reporting the sale of two separate assets. One structural asset where depreciation recapture is required, and one land asset where no depreciation was taken, therefore nothing to recapture. This is so uncommon that I'd call it not only rare, but extremely rare - but some do that for a perfectly viable reasons.

If you follow the guidance below, things will work out just fine assuming you have a "typical" rental property that you sold.

Pay close attention to detail in the below guidance. Otherwise, the math won't work the way you expect it to and it's possible the SCH D and 4797 will be all messed up.

Reporting the Sale of Rental Property

If you qualify for the "lived in 2 of last 5 years" capital gains exclusion, then when prompted you WILL indicate that this sale DOES INCLUDE the sale of your main home. For AD MIL personnel who don't qualify because of PCS orders, select this option anyway, because you "MIGHT" qualify for at last a partial exclusion.

Start working through Rental & Royalty Income (SCH E) "AS IF" you did not sell the property. One of the screens near the start will have a selection on it for "I sold or otherwise disposed of this property in  2019". Select it. After you select the "I sold or otherwise disposed of this property in 2019" you continue working it through "as if" you still own it. When you come to the summary screen you will enter all of your rental income and expenses, even it it's zero. Then you MUST work through the "Sale of Assets/Depreciation" section. You must work through each individual asset one at a time to report its disposition (in your case, all your rental assets were sold).

Understand that if more than the property itself is listed in your assets list, then you need to allocate your sales price across all of your assets.  You will only allocate the structure sales price; you will NOT allocate the land sales price, since the land is not a depreciable asset.  Then if you sold this rental at a gain, you must show a gain on all assets, even if that gain is $1. Likewise, if you sold at a loss then you must show a loss on all assets, even if that loss is $1

Basically, when working through an asset you select the option for "I stopped using this asset in 2019" and go from there. Note that you MUST do this for EACH AND EVERY asset listed.

When you finish working through everything listed in the assets section, if you ever at any time you owned this rental you claimed vehicle expenses, then you must also work through the vehicle section and show the disposition of the vehicle. Most likely, your vehicle disposition will be "removed for personal use", as I seriously doubt you sold your vehicle as a part of this rental sale.