You enter the other half of your duplex as a rental sale. Please see I sold my rental property. How do I report that?
In TurboTax, you have to indicate you sold the rental property in both the Property Profile section and the Assets/Depreciation section of the program. You will be prompted to enter sales information during the interview in the Assets/Depreciation section of TurboTax.
You'll also have Depreciation Recapture and TurboTax will ask you to confirm your Prior Depreciation. As you go through the Rental Sale interview, TurboTax will ask you to confirm prior depreciation. The amount of prior depreciation will be shown. It should not be 0.
- Depreciation expense is an item that landlords may not know about and the fact that when you sell your rental, you have to claim all the previous years’ depreciation expense. This is called Depreciation Recapture and it's taxed in the year of sale. You may have to pay 25% on your depreciation recapture. See IRS Publication 544 Chapter 3 Depreciation Recapture, page 27.
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