It is entirely possible to have a loss in one part (in this case, house part) and a gain in another part (in this case, land part) because when one enters the sale of a rental property in TurboTax (TT), one needs to separate the sale price of the house and the sale price of the land. These sale prices are then subtracted from the corresponding acquisition price (or price when asset was put into rental service). What I need help with is how to resolve the error on TT that wants me to remove the link to Home Sale worksheet because there is loss on the house part. If I do remove the link, my tax burden skyrockets since removing the link gets rid of the partial home sale exclusion which TT correctly computed. Any suggestion for someone who has been through this successfully?
