I have always done my own taxes with TT and never had any issues. No surprise 2020 is the exception. I am attempting to get my taxes done and confused on how to handle the sale of our investment property. My wife and I had originally bought the home in April 2004 for approx. $165K. Over the years that we lived there we remodeled every room in the home, including a new kitchen, all new baths, new windows and doors, and a new deck. In July 2013 we purchased a new home and converted our original home to an investment property. At the time TT asked us for the value when placed into service and we estimated $200K for the home value and land value of $60K. While renting it we did have some expenses though out the years that I believe were recording on taxes correctly. The largest was replacing all siding and gutters and repairing the roof after a storm. The tenants moved out end of July 2020 and I spent the next month making repairs to the home to prepare it for sale including replacing the entire roof (the repair did not hold up well), new storm door, flooring, paint, etc. Home was sold Sept for $223K and we provided $4775 in seller contributions and paid seller closing cost of approx $3K (we did not use a realtor). The replacement roof was $4500 and I spent around another $2000 on other repairs and did all the other work myself (not sure if I can consider any labor expense for myself, another question I only now as I am typing this even thought of). I have been struggling with this for 2 days trying to figure out how to do this correctly. From what I have read online, I am under the impression that we would be responsible for taxes on the difference between the sales price and the put in service date plus improvements, closing cost, seller contributions less depreciation taken. TT is telling me depreciation taken over the lifetime of the rental was $35K. So I was under the impression that the taxable event would be $223,000 - ($200,000 + $4775 + $3,000 + $4500 + $2000) - $35,000 = $43,725. But not sure if this is correct or if I need to use the original purchase price or if I need to somehow take into consideration the land value also. And even if my understanding is correct I am still not sure how to put this into TT. I have tried doing under the rental property section with no luck so tried doing under other business sales and when I use my figures TT is showing my taxes go WAY up more than expected since I was expecting to pay 15% of the $43,725 figure. TT is calculating closer to 20% and our combined income is def not above $496K so thinking I am still not doing this correctly. Need to get this resolved in a hurry since taxes are due in a couple days. Any help is appreciated!!
