@Todd F wrote:
Should the "Cost" line reflect the total purchase price of the property, or the total purchase price less the FMV of the land?
The reason I'm asking is that I originally had it reflect the total purchase price less the price of the land ... When I changed it to what is reflected below, where now the "Cost" reflects the total purchase price of the home, and the "Land" is about 14% of that value, Turbo Tax then calculates and Capital Loss much closer to what I expected.
Yes, it should be the TOTAL cost (building and land combined).
However, from what you said and from what your depreciation shows, you had the wrong numbers in before. That means your depreciation has been wrong for the last 4 years.
That means two things: (1) you need to enter the "prior depreciation" that you SHOULD have taken. That is what the law requires. (2) You can amend the last 3 years to claim the proper depreciation on those tax returns.
