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See the answers to your questions below and see your other question and answer which may be duplicated in part. Yes, report all of the income from the property, and ordinary expenses, then add the 'cash for keys' as part of your selling expenses. Any improvements in 2024 cannot be added as assets because the tax law requires that assets cannot be placed in and out of service in the same year. For this reason you will add these improvements as selling expenses. Remove any new assets you added that were placed in service in 2024. Next sell each asset in your rental activity after allocating sales price and selling expenses to each asset.  Other items you can add to the selling expenses are shown below. Government Recording and Transfer Charges  Recording fees Title Charges Lenders Title Policy Settlement or Closing Fee MLC - Municipal Lean Certificate Title Exam Owners title Insurance You can include these closing costs and add them to the cost basis of the property as noted above.   Example of arriving at the selling price and sales expenses for each asset in your rental activity.   Example:  Original Cost (of each asset on your depreciation schedule) $10,000 Land                = 13.33% (Carries a more favorable tax treatment but if you don't have land you can ignore this asset.) $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.