Yes. You are reporting it properly. Be sure to enter the depreciation when asked and your profit or loss will be reported correctly since the property is no longer part of your tax return. If you did not have a passive loss carryover, then you do not need to enter the rental assets and activity in your 2024 return. Continue as you indicated in your question - Sale of Business Property.
The state where the property is situated does require income tax to be paid to their state assuming that state has income tax.
State Returns - Assumes both states require income tax returns to be filed:
- Report the income on each state return that is from the nonresident state
- Report it on your resident state and receive credit for taxes paid to another state.
Credit for taxes paid to another state is allowed by a resident state when the same income is being taxed to another state. Your resident state does not want you to pay tax twice on the same income. The credit that is allowed will be the lesser of:
- the tax liability actually charged by the nonresident state, OR
- the tax liability that would have been charged by your resident state
In most cases complete your nonresident state first. This allows TurboTax to apply the credit to your resident return.
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