@wmgman I see quite a bit of incorrect information in this thread that is going to cost you quite a bit of money tax-wise if you follow it. I suspect that with all the posts the TTX reps read in a day, it's quite easy to miss things. Even if they're obvious. (I'm guilty of that too.) Let me recap, and provide you the correct information.
Rental Property 2010 - 2020:
Converted back to 100% Rental property with adjusted basis of $91,316 (Original Basis - Prior Depreciation + Capital Improvement)
That was correct. That is how you "account for" the prior depreciation already taken.
Q1) After you enter the sale in the rental section, you will encounter a screen that has a box containing prior depreciation. This amount can be overwritten to include the previous depreciation.
That is incorrect. You already accounted for the prior depreciation already taken, when you reduced the cost basis by that prior depreciation already taken, when converted back to rental in 2010. Leave the prior depreciation exactly as it appears in the program.
Later you say "Using tax documents, land is valued at $92,400 leaving the home valued at $157,600 for the purpose of allocating the sale."
What the tax values are, have absolutely no bearing in in way, shape, form or fashion on your 2020 tax return. You don't need tax values for anything what-so-ever.
Now to your questions (correctly answered)
1. There does not appear to be any place to add in the depreciation for the prior period ($18,819). Shouldn't there be some place to add in this prior depreciation? (Yes, I realize this is a less usual case).
No, you will ***not*** "add in" any prior depreciation from the first rental period. You already accounted for that prior depreciation when you reduced the cost basis in 2010. That in and of itself "accounts" for it.
2. The sale is rolling forward as a capital gain of $84,641on 4797 line 7. TurboTax is excluding the land from the 2 of 5 exemption. Is this really supposed to be the case or am I doing something wrong? It was all purchased as one property in 1993 and used/rented as one property throughout.
My "train of thought" on this indicates that either you and I are not on the same page, or something else is wrong. Understand that your recaptured depreciation is *not* exempt from being taxed under the "2 of last 5" rules. (2 of last 10 in your case). You will pay taxes on that recaptured depreciation, no matter what.
One advantage for you, is that since you followed the IRS rules of reducing your cost basis by depreciation already taken when you converted the property back to a rental in 2010, is that the $18.819 of deprecation taken 2001-2006 is not taxed since it's not treated as "prior depreciation taken" any longer.
