Investors & landlords

The sales price will need to be separated for building and land, and other assets you might have listed on depreciation that were also sold.

The sales price is what you sold the property for and the selling expenses would be part of your settlement statement.  Here is a list of examples.

• Real estate commissions
• Transfer tax
• Legal fees
• Advertising fees
• Home inspection reports
• Title insurance
• Geological surveys
• Loan charges (points) or other fees paid on the buyer's behalf

Sales expenses do not include:

•  Mortgage payoffs
•  Home equity loan payoffs
•  Rent-back costs
•  Payoff to creditors
•  Property taxes
•  Home owner association fees

Use the original cost of each asset listed on depreciation, 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%

Multiply each percentage times the sales price/sales expenses to arrive at each individual sales price/sales expense.

I hope this example provides clarification to enter your sale.

You need to dispose of the property by telling TurboTax how and when it was disposed of.  Follow the instructions below.

1. Click on Income & Expenses
2. Under Your income and expenses, scroll down to
3. Rental properties and royalties, click Edit/Add
4. Do you want to review your rental?, click Yes
5. Under Rent and Royalty Summary, click Edit
6. Click Update to the right of Assets/Depreciation.
7. Do you want to go directly to your asset summary?, click Yes and Continue
8. Click Edit to the right of each asset to be disposed
9. Go through several screens until you get to Tell Us More About This Rental Asset
10. Click on This item was sold…….   And continue to answer the questions

You might also review information here.