If you have sold any or all of your assets in your rental activity you can use the steps below to enter your sale and calculate your cost basis if necessary.
First I will place an example of how yo...
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If you have sold any or all of your assets in your rental activity you can use the steps below to enter your sale and calculate your cost basis if necessary.
First I will place an example of how you prorate the selling price to each of the assets including the land.
For any asset, such as appliances, that really have no value because they are past the recovery period of five years you can use a zero.
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. If you want you can check the allocation of building and land in your county real estate tax office, on file now.
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.
Passive Activity Loss Entry if applicable:
Assuming your passive losses were carried over each year, this will be a separate and identifiable entry which will carry to the Schedule E. The full remainder of passive loss carryover is used in the year of sale as an expense. This is combined with your overall rental gain or loss to your Form 1040.
When you are on the screen 'Do any of these situations apply to this property?' (Property Profile section), be sure to check the box under Carryovers.
See my notes below on entering the sales price/expenses for each asset inside the rental activity.
You need to dispose of the property by telling TurboTax how and when it was disposed of. Follow the instructions below.
Click on Search (upper right) > type schedule e > Enter > click Jump to .... link
Answer the questions and on under Rent and Royalty Summary, click Edit
Click Update to the right of Assets/Depreciation.
Do you want to go directly to your asset summary?, click Yes and Continue
Click Edit to the right of each asset to be disposed of
Go through several screens until you get to Tell Us More About This Rental Asset
Click on This item was sold……. And continue to answer the questions
You might also review information here for more details