This takes place with each asset. See the details here and all assets must be reviewed and sold even if you don't designate a selling price such as appliances.
Report the sale under your rental house. Under Income select your Rental Income > Edit > Continue to the screen 'Tell Us More About This Rental Asset'. Select that you purchased it, also select the item was sold, retired, ...., etc. > Yes always used 100% for business if there was no personal use during ownership since the rental activity began.
Selling expenses would include last minute repairs to prepare for sale, and if you used a cost other than your actual cost (such as fair rental value because it was lower than your cost) when you placed the condo in service for rental, then you would use actual cost to determine gain or loss at the time of sale. Add any difference to selling expenses if this is the case. The expenses would be capital improvements only not repairs or expenses that are ongoing such as utilities or minor repairs.
If you had any losses that were not allowed in prior years and were carried over because of your income level, all losses are allowed in the year of sale and do not get included in your sale figures. TurboTax will know this information if you entered any passive unallowed losses from 2023. When you select to Edit next to your rental property, scroll to Less Common Situations to review any carryover losses (from Form 8582 in your 2023 tax return). TurboTax should carryover this loss automatically, so confirm, if this applies to you.
To figure out the selling price for each asset:
- Take the current basis of each asset against the total combined basis of all of your assets to figure out the sales price for each one; OR
- Determine a fair market value for each asset against the total value of all assets to figure out the sale price for each one.
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.
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