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Can I enter expenses from the sale of rental property?

 
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1 Reply
Coleen3
Intuit Alumni

Can I enter expenses from the sale of rental property?

Which expenses are you referring to? Closing costs are added to the basis of the property.

  1. With your return open in TurboTax, search for rentals and then click the "Jump to" link in the search result.
  2. Answer Yes to the question Did you have any rental or royalty income and expenses?
  3. When you get to Is this a rental property or royalty? select Rental property and fill out the description, address, and owner.
  4. When you hit Do any of these situations apply? you'll definitely want to check the Sold box along with any other boxes that may apply.
  5. Continue following the onscreen prompts to enter info about your rental property. Eventually you'll get to the Rental Summary screen. Here, you can report the sale in the Sale of Property/Depreciation section, along with any other pertinent info (income, expenses, etc.)
Terminology Tips
  • Sales Price – If you received a Form 1099-S, look in Box 2 (Gross Proceeds), which will generally be your contract sales price. You can also use the gross proceeds amount from your settlement closing statement.
  • Sales Expenses for selling your property include sales commissions, advertising, broker and legal fees, and transfer taxes.
  • Basis is your rental's original purchase price plus settlement costs at time of purchase (abstract, legal, and recording fees, surveys, transfer taxes, owner's title insurance) .
  • Adjusted basis is your basis plus improvements and sales expenses minus depreciation.

Please follow these steps to help you correctly enter the sale of your rental property:

 1.. In Online TurboTax Premier, click the bars at the upper left corner to show Federal Taxes on the selection list

2. Select Business Income & Expenses, in the next screen, click I'll choose what I work on.

3. On the Your Income Summary screen (Premier edition), scroll down to the Rentals and Royalties group.

4. Click Start/Update next to the Rentals and Royalties line and step through the rental interviews to the Rental and Royalty Summary screen.

5. Click Start/Update next to the property you sold.

6. Click Continue to proceed to the Do Any of These Situations Apply to This Property? 

7. Check the box next to the I sold or disposed of this property in 2017 line and click Continue.

Follow the prompts to enter information about the sale of your rental. As you go through the interview, these terms and definitions may be helpful:

Sales Expenses for selling your property include: 

  • Sales commissions
  • Advertising Expenses
  • Legal Fees
  • Broker Fees
  • Transfer taxes

•Cost Basis is the rental's purchase price plus buying costs (fees you paid in connection with the purchase such as legal fees, abstract fees, survey charges, owner's title, etc.) plus improvements, minus depreciation.

•Adjusted basis is the rental's purchase price plus buying costs plus improvements plus sales expenses, minus prior-year depreciation.

For additional information, refer to Publication 527, Residential Rental Property

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