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user415355251
New Member

I sold a rental home (once my primary) for a gain and I have been depreciating it for last 5 years. I am uncertain on taxes...can someone please advise me on this?

Bought the house in 2009, converted to rental in either 12 or 13 and had it rented off and on.  I took full depreciation on the property each year.  How do I calculate the taxes on this in the TurboTax system?
3 Replies
Hal_Al
Level 15

I sold a rental home (once my primary) for a gain and I have been depreciating it for last 5 years. I am uncertain on taxes...can someone please advise me on this?

Here's a similar question and answer   <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/4139689-can-i-report-a-loss-on-a-property-that-was-converted-from-...>
TaxGuyBill
Level 9

I sold a rental home (once my primary) for a gain and I have been depreciating it for last 5 years. I am uncertain on taxes...can someone please advise me on this?

In the event the Fair Market Value when you converted it to a rental was LESS than your Adjusted Basis a that time (usually purchase price, plus cost of improvement, minus any depreciation prior that time), please post back, as reporting that situation can be quite tricky.
Carl
Level 15

I sold a rental home (once my primary) for a gain and I have been depreciating it for last 5 years. I am uncertain on taxes...can someone please advise me on this?

Here's how to report this in TurboTax.

Reporting the Sale of Rental Property

If you qualify for the "lived in 2 of last 5 years" capital gains exclusion, then when prompted you WILL indicate that this sale DOES INCLUDE the sale of your main home. For AD MIL personnel who don't qualify because of PCS orders, select this option anyway, because you "MIGHT" qualify for at last a partial exclusion. Do note that you must have lived in the property for at least 24 months of the last 60 months you owned it, counting backwards from the closing date of the sale.

Start working through Rental & Royalty Income (SCH E) "AS IF" you did not sell the property. One of the screens near the start will ahve a selection on it for "I sold or otherwise disposed of this property in  2016". Select it. After you select the "I sold or otherwise disposed of this property in 2016" you continue working it through "as if" you still own it. When you come to the summary screen you will enter all of your rental income and expenses, even it it's zero. Then you MUST work through the "Sale of Assets/Depreciation" section. You must work through each individual asset one at a time to report it's disposition (in your case, all your rental assets were sold).

Understand that if more than the property itself is listed in your assets list, then you need to allocate our sales price across all of your assets.  You will only allocate the structure sales price, you will NOT allocate the land sales price, since the land is not a depreciable asset.  Then if you sold this rental at a gain, you must show a gain on all assets, even if that gain is $1. Likewise if you sold at a loss then you must show a loss on all assets, even if that loss is $1

Basically when working through an asset you select the option for "I stopped using this asset in 2015" and go from there. Note that you MUST do this for EACH AND EVERY asset listed.

When you finish working through everything listed in the assets section, if you ever at any time you owned this rental you claimed vehicle expenses, then you must also work through the vehicle section and show the disposition of the vehicle. Most likely, your vehicle disposition will be "removed for personal use", as I seriously doubt you sold your vehicle as a part of this rental sale.


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