We converted a personal home to a rental property in 2012. For depreciation, we used the fair market value at the time of conversion, which was significantly lower than the purchase price + improvements. We sold the property in 2024. TurboTax is giving me grief regarding calculation of the accumulated depreciation AND cost basis for calculating capital gains when reporting the sale under the Rental Income section. Specifically, the interview questions do not seem to take into account that we used the fair market value for depreciation (not purchase price + improvements), and does not take into account the significant improvements we've made to prepare the home prior to putting it on the market.
Therefore, I just reported the sale under the Sale of Business Property section. Any issues with reporting the sale of rental property in this section, vs. answering the questions in the Rental Properties section?
No, as long as you made sure that your accumulated depreciation figure was correct. Save all documentation regarding your adjusted basis and maintain it in case there are ever any questions.
No, as long as you made sure that your accumulated depreciation figure was correct. Save all documentation regarding your adjusted basis and maintain it in case there are ever any questions.