Depreciation of asset from sale of rental property

[dpfans]

Need some help in regards to a "subasset" from a rental property I sold

This rental property was 100% rental no personal use.

Two questions:

1. Do I need to go into all the depreciable assets for the rental property I sold and close them out 

by stating YES to ..."Did you stop using this asset in 2023?"   I ask this because some of the assets are old and the depreciation is 0.   

2.  One asset that is still getting depreciation is SIDING...that was put on at a cost of 10K

Prior depreciation about 6K and have almost 300 in 2023 depreciation

 ----    TT asked "Did you stop using this asset in 2023?"   YES

----  TT wanted disposition information 

Date of sale (I put the date I sold the residential rental property) 

Date Acquired (I did not change this date used when siding was put on July 2014)

--- Special Handle Required?  Screen showed up

     Select YES if any condition apply:

    The conditions I'm not sure about are... 

     -This is an INTANGIBLE ASSET not considered section 1245 property ?? I think the answer is NO

     -This asset was a rental, a home office, or a home office improvement within a home?  I think this is NO

(I did not rent the siding.  it was not part of a home office and not a home office improvement)

I  clicked on NO (Special Handling Required) 

TT screen has

Home Sale

  Address of rental property: New Siding

Question:  Was this asset included in the sale of your main home? I answered NO to this question.  

(My assumption is TT is asking if the siding was part of the home I am living in which is odd

because I am in RENTAL acty.  OR is this just an odd way of asking is this part of the residential rental property you sold.

-----NEXT Screen

Sales Information

 Address of rental property:  New Siding

    Sales PRICE (Business Portion Only):   HOW DO I COME UP WITH THIS...ORIGINAL price- all Depreciation 

   Sales Expenses (Business Portion Only):  I think this 0

Property Type ?????

Sec 1245 - Trade or business property

Sec 1250 - Real Property

Between Sec 1245 and Sec 1250 what would I pick for SIDING on the residentional rental 

NOTE:    I used the amount I paid for the siding (10K) minus the depreciation over the years ($6300 includes this year depreciation) =  $3700 that was not depreciated so I used this as SALES Amount

                $3700 For the SALES amount 

TT NEXT screen is

Results

You have no gain or loss on your disposition of new siding

I would still like to take off the 3700 as a capital improvement  or something.

Does TT do this in the background?   or Do I add this (3700) somewhere else? 

What am I doing wrong?

thanks in advance  

[DianeW777]

The answers to your questions are listed below in the order you asked them.  

1. Do I need to go into all the depreciable assets for the rental property I sold and close them out by stating YES to ..."Did you stop using this asset in 2023?"   I ask this because some of the assets are old and the depreciation is 0.  
   1. Yes, you do need to mark each asset sold, if you had no sales price for some assets you can enter zero as the selling price and selling expense (example might be appliances).
2. One asset that is still getting depreciation is SIDING...that was put on at a cost of 10K
   1. Every asset needs to be marked as sold.  You must prorate the selling price and selling expenses based on the percentage appropriate for each asset. See example later. There should be no 'Special Handling' selected.
3. Sale of home questions: TurboTax asks about this because sometimes a rental is converted to a home and then sold.  You should answer no this was not part of you home sale.
4. The selling price for the siding is not zero.  See how to prorate the selling price and selling expenses below.
5. The type of property is Section 1250 for the main house, any capital improvement that is part of the house such as the siding. Section 1245 property is any appliance or asset that is not part of the rental home itself if you have any.

The remaining cost basis in the siding is used to reduce your overall gain.  It does have a sales price as noted below.

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. (Choices would also be fair market value on the date of the sale or adjusted basis on the date of the sale, which is cost less depreciation.)

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.

You need to dispose of the property (and each asset) by telling TurboTax how and when it was disposed of.  Follow the instructions below.

1. Click on Wages & Expenses
2. Scroll to Rental properties and royalties, click Edit/Add or Start/Revisit
3. Do you want to review your rental?, click Yes
4. Under Rent and Royalty Summary, click Edit
5. Click Update to the right of Assets/Depreciation.
6. Do you want to go directly to your asset summary?, click Yes and Continue
7. Click Edit to the right of each asset to be disposed of/sold
8. Go through several screens until you get to Tell Us More About This Rental Asset
9. Click on This item was sold…….   And continue to answer the questions

You might also review information here.

[DianeW777]

The answers to your questions are listed below in the order you asked them.  

1. Do I need to go into all the depreciable assets for the rental property I sold and close them out by stating YES to ..."Did you stop using this asset in 2023?"   I ask this because some of the assets are old and the depreciation is 0.  
   1. Yes, you do need to mark each asset sold, if you had no sales price for some assets you can enter zero as the selling price and selling expense (example might be appliances).
2. One asset that is still getting depreciation is SIDING...that was put on at a cost of 10K
   1. Every asset needs to be marked as sold.  You must prorate the selling price and selling expenses based on the percentage appropriate for each asset. See example later. There should be no 'Special Handling' selected.
3. Sale of home questions: TurboTax asks about this because sometimes a rental is converted to a home and then sold.  You should answer no this was not part of you home sale.
4. The selling price for the siding is not zero.  See how to prorate the selling price and selling expenses below.
5. The type of property is Section 1250 for the main house, any capital improvement that is part of the house such as the siding. Section 1245 property is any appliance or asset that is not part of the rental home itself if you have any.

The remaining cost basis in the siding is used to reduce your overall gain.  It does have a sales price as noted below.

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. (Choices would also be fair market value on the date of the sale or adjusted basis on the date of the sale, which is cost less depreciation.)

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.

You need to dispose of the property (and each asset) by telling TurboTax how and when it was disposed of.  Follow the instructions below.

1. Click on Wages & Expenses
2. Scroll to Rental properties and royalties, click Edit/Add or Start/Revisit
3. Do you want to review your rental?, click Yes
4. Under Rent and Royalty Summary, click Edit
5. Click Update to the right of Assets/Depreciation.
6. Do you want to go directly to your asset summary?, click Yes and Continue
7. Click Edit to the right of each asset to be disposed of/sold
8. Go through several screens until you get to Tell Us More About This Rental Asset
9. Click on This item was sold…….   And continue to answer the questions

You might also review information here.

[DianeW777]

The answers to your questions are listed below in the order you asked them.  

1. Do I need to go into all the depreciable assets for the rental property I sold and close them out by stating YES to ..."Did you stop using this asset in 2023?"   I ask this because some of the assets are old and the depreciation is 0.  
   1. Yes, you do need to mark each asset sold, if you had no sales price for some assets you can enter zero as the selling price and selling expense (example might be appliances).
2. One asset that is still getting depreciation is SIDING...that was put on at a cost of 10K
   1. Every asset needs to be marked as sold.  You must prorate the selling price and selling expenses based on the percentage appropriate for each asset. See example later. There should be no 'Special Handling' selected.
3. Sale of home questions: TurboTax asks about this because sometimes a rental is converted to a home and then sold.  You should answer no this was not part of you home sale.
4. The selling price for the siding is not zero.  See how to prorate the selling price and selling expenses below.
5. The type of property is Section 1250 for the main house, any capital improvement that is part of the house such as the siding. Section 1245 property is any appliance or asset that is not part of the rental home itself if you have any.

The remaining cost basis in the siding is used to reduce your overall gain.  It does have a sales price as noted below.

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. (Choices would also be fair market value on the date of the sale or adjusted basis on the date of the sale, which is cost less depreciation.)

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.

You need to dispose of the property (and each asset) by telling TurboTax how and when it was disposed of.  Follow the instructions below.

1. Click on Wages & Expenses
2. Scroll to Rental properties and royalties, click Edit/Add or Start/Revisit
3. Do you want to review your rental?, click Yes
4. Under Rent and Royalty Summary, click Edit
5. Click Update to the right of Assets/Depreciation.
6. Do you want to go directly to your asset summary?, click Yes and Continue
7. Click Edit to the right of each asset to be disposed of/sold
8. Go through several screens until you get to Tell Us More About This Rental Asset
9. Click on This item was sold…….   And continue to answer the questions

You might also review information here.