How to enter partial year depreciation for rental property

[bettyzhoumd]

I stopped renting later last year and prepared the property for sale. I entered "250 days rented" and "No" to "Was this property rented all year?". The depreciation came back as the whole year number. There is a place to enter the sale/disposition date but once I entered it, it's treated as sale, not stopping using as rental. And the depreciation came back as 0.

So how do I enter partial year depreciation for rental property or make TurboTax calculate partial year depreciation?

Thanks a bunch!

[ThomasM125]

I put in an entry like you explained and I got the partial year depreciation. This is what I did, you can copy my steps and it may work for you:

   - Edit your rental property entries

   - On the screen that says Review your Rental Summary, choose Assets/Depreciation

   - Go to the asset summary and edit the property you sold

  - On the screen that says Tell us more about this rental asset -  indicate that the asset was sold, retired, stolen, etc...

  - Enter the date sold and indicate the property was used 100% for business and enter the date put into service

  - On the next screen confirm the prior depreciation (cost of asset/27.5 years divided by 12 times months rented)

  - On the sales information screen I entered the sales proceeds and cost basis

  - On the Results screen I got the correct partial year depreciation for the year of sale

[bettyzhoumd]

Thanks for your reply. The only problem is that I didn't sell the property last year. The sales was closed this year in 2026. Should I just take 12 month depreciation for 2025?

[ThomasM125]

No, you can't depreciate the property during the period it was not actively being rented or made available to rent. When you edit the rental, on the screen that says Do any of these situations apply to you? you can choose the option that says I converted the property from rental use to personal use. Then follow the other steps I suggested to show the asset being sold but don't add any sales proceeds or cost basis on the screen where you enter the asset sale.

Next year the rental will likely not show in your TurboTax since you took it out of service. So, document the cost and accumulated depreciation on the asset as you will need that to report its sale. You will see an option to report the sale in the business section, on the screen that says Let's gather your business info. Look towards the bottom and you will see Less Common Business Situations, and then Sale of Business Property.