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user9873901
Level 1

How would I record the sale of my rental property in TurboTax given that it was not rented during 2016, but had accumulated passive activity losses from previous years?

Rental property was rented out until Nov 2015 at which time it was listed for sale and finally sold Feb 2016. 

Property was not rented out at all in 2016 and was listed for sale and not listed for rent. Property never used for personal residence.

Expenses were incurred in 2016 while preparing the property for sale (utilities, repairs, travel).

Accumulated passive activity losses exist.

Do I record the sale under Business "Rental Properties and Royalties" section or "Less Common Business Situation" - "Sale of Business Property". 

Would it be correct to record the sale under the "Rental Properties" section, so that I can take advantage of the passive activity loss deduction and also record the expenses under "Asset Sales Expenses"?

1 Best answer

Accepted Solutions
HelenaC
New Member

How would I record the sale of my rental property in TurboTax given that it was not rented during 2016, but had accumulated passive activity losses from previous years?

Yes, you would record the sale of your rental in the Rental Properties section of TurboTax. All the information from the previous years (loss carryovers, depreciation, etc.) would be reflected in the sale.

Please see the following TurboTax FAQ:

https://ttlc.intuit.com/replies/3388350

Per IRS Publication 527 Chapter 1 page 4  Vacant while listed for sale.

  • If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. 
  • If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses

Additional information:

2015 Publication 544 - IRS.gov (Note: 2016 was not available at the time of this posting.)

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4 Replies
HelenaC
New Member

How would I record the sale of my rental property in TurboTax given that it was not rented during 2016, but had accumulated passive activity losses from previous years?

Yes, you would record the sale of your rental in the Rental Properties section of TurboTax. All the information from the previous years (loss carryovers, depreciation, etc.) would be reflected in the sale.

Please see the following TurboTax FAQ:

https://ttlc.intuit.com/replies/3388350

Per IRS Publication 527 Chapter 1 page 4  Vacant while listed for sale.

  • If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold. 
  • If the property is not held out and available for rent while listed for sale, the expenses are not deductible rental expenses

Additional information:

2015 Publication 544 - IRS.gov (Note: 2016 was not available at the time of this posting.)

user9873901
Level 1

How would I record the sale of my rental property in TurboTax given that it was not rented during 2016, but had accumulated passive activity losses from previous years?

Thank you.  The challenge I had was that TurboTax automatically deletes it as a rental if I select the checkbox "I did not rent, not attempt to rent, this property at all in 2016." ... That doesn't seem correct if you also sold your rental property in 2016 (as in my case).  I am attaching a screenshot in the details of my original question...
user9873901
Level 1

How would I record the sale of my rental property in TurboTax given that it was not rented during 2016, but had accumulated passive activity losses from previous years?

I got around that issue by just not selecting that checkbox... then, TurboTax allows me to report Schedule E (even though I did not rent or attempt to rent the property at all in 2016 - as it was listed for sale)
skottdaman
New Member

How would I record the sale of my rental property in TurboTax given that it was not rented during 2016, but had accumulated passive activity losses from previous years?

Thanks, Not checking the box totally solves the issue. Turbo tax should have a message indicating that.

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