Yes, you should list the rental home itself as an asset in your rental activity. Be sure to enter the date you first placed this rental property in service for rental use.
Be prepared to enter both the building and the land portion of the cost. Once you enter this you will be asked if it was sold or disposed of and TurboTax will lead you the rest of the way through the sale.
- Usually you can use the tax assessment to determine the percentage of the cost that applies to land and building.
Depreciation is considered used, even if you did not previously enter the rental home on your tax return. This means that it will reduce your cost basis before calculating the taxable gain on the sale. If it has not been fully depreciated and you did not take advantage of the depreciation in the past, you may be able to amend tax returns for 2018, 2019 and 2020. For 2018, it must be completed before April 15th.
If you other assets such as furnishings are also gone with the home, be sure to mark them sold. You can enter zero for the sales price if you are entering the entire proceeds in the home and land, if applicable.
Here is an example of how to figure out your selling price for each.
Use the original cost of each asset listed on depreciation (all belongs to house B now) add those together then divide each one by the combined total to find the percentage of the cost for each asset. Use that percentage times the sales price and sales expenses to find the selling price/sales expenses for each asset.
Example: Original Cost (of each asset on your depreciation schedule)
$10,000 Land = 13.33%
$50,000 House = 66.67%
$15,000 Improvements = 20%
$75,000 Total = 100%
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