Do I enter asset sale price as 70k in sale of rental? Contract price 80k. Land value today 10k.

[tpagal]

When entering the property (the home itself) in the depreciation schedule and clicking "I sold it this year", it asks for the sales information.  See above numbers.  Then when I enter the next asset ie. roof, CHA, appliances it asks for the same sales info.  Do I leave those blank?

[ColeenD3]

Yes, the house and all its components sold for $80,000 (including land). You would zero sales price for its components.

[tpagal]

Ok, just to confirm of the 80k contract price I enter 70k under asset sale price and 10k under land sale price leaving asset and land sales expense boxes blank.   Then every other asset listed i would enter zero on the same sales information boxes.     Thanks, C

[ColeenD3 · Accepted solution]

Yes. However, if you did have sales expenses such as any below, you can include them in the expense boxes. You would prorate by percentage between the house and land.

• Agent commission
• Transfer tax
• Title insurance
• Escrow and closing fees
• Prorated property taxes
• Credits toward closing costs
• Attorney’s fee

[tpagal]

Thank you for your quick replies.  In regards to costs, I had did protected taxes but also prorated rent and then they listed security deposits for RENT that were transferred to the new buyer.  So, I deduct all of those as "closing expenses" but only under the asset sales expenses?  Thanks again.  I have 5 rentals and a whopping tax bill.  Just making sure I am entering everything in the right place.

[tpagal]

One last thing on the expenses.  Since the house was sold for less than the mortgage, we had to bring 4800 to closing.  Is that deducted anywhere? Thanks, C

[ColeenD3]

No. Your mortgage has nothing to do with your gain, nor does having to bring cash to the table.

[tpagal]

To verify, sale expenses are only entered for the sale of the house (asset) and not its various components.  Correct?  And is prepaid rent, transfer of security deposit considered sales expenses?  Thanks

[ColeenD3]

The sales expenses should be allocated by percentage between land and building. Prepaid rent is income. The transfer of the security deposit fees is a rental expense, not a sales expense.