Yes, you may still have to file Schedule E to list any income, expenses, and other items prior to the sale. TurboTax will automatically generate the Schedule E and carry the amounts to other forms on your Form 1040, as needed.
To enter the rental sale, see I sold my rental property. How do I report that?
When you sell a rental, in addition to capital gains, you may have Depreciation Recapture. If you dispose of depreciable or amortizable property at a gain, you may have to treat all or part of the gain (even if otherwise nontaxable) as ordinary income.
- You depreciated the building and other assets in years past.
- You received the benefit of a depreciation deduction that offset ordinary income tax rates.
- The government is not going to grant the most favorable capital gains rates on the portion of the gain relating to these prior depreciation deductions.
- For additional information, see IRS Publication 544 Chapter 3 Depreciation Recapture.
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