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Basicallyf you selected the option for "I sold or otherwise disposed of this property in 2020" and then for each and every asset you selected YES for the "Special Handling Required?" screen, then you're done. The 2020 tax return will be the last year you report this property on SCH E. If it gets imported next year, then you can just delete it.
Take note that if the value of the gift given was more than $15,000, then you will need to file IRS Form 709-Gift Tax Return with the IRS. Don't let the name of that form mislead you. You will "NOT" pay any taxes on your gift. All you are doing is satisfying a legal reporting requirement, and that's pretty much it.
TurboTax does not include the form 709, since it really has nothing to do with your federal income taxes. You can get a blank form at https://www.irs.gov/pub/irs-access/f709_accessible.pdf print it, fill it out and mail it to the IRS at the address in the instructions. The address you mail the 709 to may not be the same address you mail a tax return to. So make sure to read the instructions which are referenced at the top of the form.
I gifted (quitclaim for $10) unimproved land to my niece. The part that asks if I disposed of property indicates NOT to check box if disposition was to family. A couple screens later is screen for non depreciable property (unimproved land). The assets page for that only shows blanks for sale of asset. I have read not to put '0' in the sale box. Do I ignore the assset section? How do I show I no longer have the property? I will file form 709, but that appears to be a totally separate issue. Do I just ignore/delete the information that will be carried over to 2023 turbo tax? I inherited the land from my parents and am passing it on to their granddaughter, no money involved.
If you are filing form 709 for this property then that is all that you need to do. Leave it off of your tax return.
Thanks Robert. I see I didn't indicate this was rental property (grazing land), non-depreciable, in my question. Does that make a difference to your answer?
No. You do not need to report a gift of rental land on your income tax return since gifting does not create a taxable income tax gain or loss.
As Tax Expert @RobertB4444 said, you may need to file a gift tax return to reduce your lifetime exclusion.
See Frequently Asked Questions on Gift Taxes.
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