Carl
Level 15

Investors & landlords

Since those two assets were placed in service and sold in the same tax year, it would be incorrect to depreciate them. They should not be entered into the assets/depreciation section at all. The only correct way to report this sale per IRS guidance is to convert the property to personal use with a conversion date of the closing date of the sale. Then, and only then, can you get the complete depreciation taken on the property and any other depreciated assets, up to the date of the sale.

Next, you report the sale in the "Sale of Business Property" section where you have to manually type in everything, including the total cost basis; which would of course include the cost of the two property improvements done in 2022.