Yes, you split the sales proceeds between the land (property) and improvements (the structure) If you set up the rental property correctly in TurboTax, you will have multiple assets: The house/structure, the land, and any other assets added, such as appliances, renovations, additions, etc. I recommend you allocate the sales proceeds based on the remaining cost basis of each asset. For instance, if you sold the rental property for $200,000 and had the following adjusted basis for each asset:
House - $50,000
Land - $25,000
Addition - $15,000
Appliances - $10,000
You would apply the proceeds to those assets as follows
House - $100,000
Land - $50,000
Additions - $30,000
Appliances - $20,000.
As for your comments about the state and federal capital gains, you will need to clarify, and perhaps phrase as a question. If you have a gain, 100% of that gain is subject to federal tax, either capital gain or depreciation recapture. Similarly, since the property is in Oregon, 100% of the gain is taxable by the state of Oregon.
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