In May 2005, I bought a condo at $218,000 + $4,800 closing cost. I used it as my primary residence.
In Oct 2010, I converted it to a rental. The FMV at that time was $176,400. (I reported $176,400 in Turbotax as the 'cost' for depreciation calculation. Am I correct?)
I kept renting the condo until I sold it in Feb 2020 at $151,000 and the cost of sale was $10,686.
Based on Turbotax, depreciation is $59,870.
Given the sale price ($151,000) is below purchase price ($218,000) and FMV when converted to rental ($176,400), I believe there shouldn't be a gain. Yet, Turbotax shows I have a gain of $23,784, because it calculates the adjusted cost basis as $176,400 + $10,686 - $59,870 = $127,216.
How do I correct this? And, how do I enter the original total purchase price (i.e. $218,000 purchase price + $4,800 closing cost)?