How to enter sale information for a rental property

[abrunken]

Needing help understanding what to input on sale of a rental property.

1) Can I list expenses  on improvements that I had not claimed in the past? e.g. new siding 2 years ago

2) Where do I include closing costs from when I purchased the property? (I see where to enter for the sale closing costs(

3) When listing the asset sale price and land value, are the 2 numbers to equal the amount on the 1099-S? or is the asset and land value number to exceed the 1099-s amount?

Thank you!

[DianeW777]

The sale information is shown below with your questions.  Keep in mind the 1099-S is not a direct form entry.

1. Can I list expenses  on improvements that I had not claimed in the past? e.g. new siding 2 years ago 
   1. This would have been a second depreciable asset.  First, list the improvement as a new asset using the date placed in service as the date acquired. Then you will mark it sold like the original rental asset of the rental.
2. Where do I include closing costs from when I purchased the property? (I see where to enter for the sale closing costs)
   1. Include these as part of the selling expenses and they will reduce the overall gain.  Keep records to show how you arrived at that figure on the tax return.  Do not use any loan fees, only recording fees and possibly commissions.  They should have been added to the cost basis of your rental when you entered the asset originally.  Confirm you didn't already use those purchase expenses at that time.
3. When listing the asset sale price and land value, are the 2 numbers to equal the amount on the 1099-S? or is the asset and land value number to exceed the 1099-s amount?
   1. See the instructions below for allocating your sales price to the various assets you may have on your rental property.  At the very least you have the rental home and the improvements noted above in 1.

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.

I hope this example provides clarification to enter your sale. 

You need to dispose of the property 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 sale information is shown below with your questions.  Keep in mind the 1099-S is not a direct form entry.

1. Can I list expenses  on improvements that I had not claimed in the past? e.g. new siding 2 years ago 
   1. This would have been a second depreciable asset.  First, list the improvement as a new asset using the date placed in service as the date acquired. Then you will mark it sold like the original rental asset of the rental.
2. Where do I include closing costs from when I purchased the property? (I see where to enter for the sale closing costs)
   1. Include these as part of the selling expenses and they will reduce the overall gain.  Keep records to show how you arrived at that figure on the tax return.  Do not use any loan fees, only recording fees and possibly commissions.  They should have been added to the cost basis of your rental when you entered the asset originally.  Confirm you didn't already use those purchase expenses at that time.
3. When listing the asset sale price and land value, are the 2 numbers to equal the amount on the 1099-S? or is the asset and land value number to exceed the 1099-s amount?
   1. See the instructions below for allocating your sales price to the various assets you may have on your rental property.  At the very least you have the rental home and the improvements noted above in 1.

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.

I hope this example provides clarification to enter your sale. 

You need to dispose of the property 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.

@abrunken

[Edited: 03/16/2024 | 7:12 AM PST]