I sold my rental property. Where and how is all the sales info entered.

[mikewir]

I purchased a home in 2003 and converted it to a rental property in 2009. I sold this property in 2020. As I traverse through the sale of property/depreciation section and answer all the questions, I never find a spot that actually talks about the sale. Doesn't seem right to me. Here's what's going on... I edit the residential asset in the "Your Poperty Assets" screen. Next screen is "Review Information" - info transferred from the 2019 return. I then answer yes to the "Did You Stop Using the Asset in 2020? Takes me to the Disposition Information. Per the paragraph - Date of sale entered as 10/30/2020. Date acquired 6/1/2003. "Special Handling Required?" screen then comes up..  and I select yes because the instructions say to Select Yes if the business use percentage of this asset varied during the years I owned the property (personal for the first 5 years, then rental). It then takes me to the Depreciation Deduction Amount screen and tells me what the depreciation deduction is for 2020, and then goes on the "Your Property Assets" screen. Clicking done takes me out of the section.  

I did notice under the Special Handling Required page, that if I click the  "learn more" link associated with the "business use percentage of this asset varied during the years I owned the property...." I get the following message: "If the business use percentage varied over the life of the asset, the program cannot automatically compute the sale information" - not helpful at all since I have no idea how to manually compute the sale information.  

Hoping someone can help with my frustration.

[Carl]

The below is "guidance"; not step-by-step. But it should be sufficient to get you going in the right direction. 

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.

Start working through Rental & Royalty Income (SCH E) "AS IF" you did not sell the property. One of the screens near the start will have a selection on it for "I sold or otherwise disposed of this property in  2020". Select it. After you select the "I sold or otherwise disposed of this property in 2020" 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 if it's zero. Then you MUST work through the "Sale of Property/Depreciation" section. You must work through each individual asset one at a time to report its disposition (in your case, all your rental assets were sold). If you don't have a "Sale of Property/Depreciation" section, then it's because you didn't follow the instructions about selecting the "I sold or otherwise disposed of this property in 2020" above.

Understand that if more than the property itself is listed in your assets list, then you need to allocate your 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 on some assets. Likewise, if you sold at a loss then you must show a loss on all assets, even if that loss is $1 on some assets.

Basically, when working through an asset you select the option for "I stopped using this asset in 2020" 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.

[kenzo_baby]

The MAC version of Turbo Tax 2021 does not calculate the rental home sales correctly. I started with the wizard and updated my rental income (that works) and the assets which get depreciated (2 out of 10 work), and then we get to home sales which does NOT calculate correctly. It also gives me errors an no way to fix them. How do I upload the screen shots so TT can fix the errors. Finally, there is no way to enter adjusted basis improvements on a rental home sale that are not being depreciated.

[Carl]

there is no way to enter adjusted basis improvements on a rental home sale that are not being depreciated.

As a work-around,what you can do is this.

First, show the property as converted to personal use on the closing date of the sale. Just work through each asset and select "I stopped using this asset in 2021" and remember to select YES on the special handling required screen for each asset. (If you select NO, you are force to enter sales information.)  As you work through each asset, add up the depreciation amounts (prior years and current year) for all the assets to get the total amount of depreciation taken.

Next, report the sale in the "Sale of Business Property" section.  Here you only enter totals of everything. So the total of your cost basis will include your non-depreciated property improvements that were done after the last tenant moved out, and before you sold the property.  When asked for depreciation, you'll enter the total taken on all assets, and so forth.

Remember, your closing sale date in "Sale of Business Property" needs to match the date the property was converted to personal use. (You're converting it to personal use on the date of the sale, so as to stop depreciation on that date.)

[kenzo_baby]

I followed the instructions to convert the rental property to a home sale on the day of closing. I was able to enter items into the section called "Rental properties and Royalties" with out any errors. My rental income is $44. The expenses are $24K and the depreciation is $18K. The net profit is almost nothing for the year. Now comes the sale of business property.  When I select the first option which is sales of business or rental property, the next page is "Sales of Business or rental property." There seems to be an error on the screen because the heading says "copy name" and under that it says "Copy 1"  Even if I click edit and enter information into the property sale summary and then click DONE, it goes back to some TEMPLATE page.  then when I am done with income., the system getting errors in the FIX which I am unable to fix. (system will not allow me to fix the errors) There are 7 errors. 1 First is"Check this entry" for Home sales worksheet. it says there is no entry and I cannot edit it. I notice that all the numbers that I can see on the form  are all INCORRECT. then another error on form 2210. Then rest of errors are on form E, PLEASE HELP

[MarilynG1]

You don't need to enter the Sale of your Rental Property in the 'Sale of Business Property' section since you had Rental Activity in 2021. You can Delete the Copy 1 you started in that area. 

Enter the Sale of Rental Property in the Rental Section.  In the Property Profile, you indicate that the property was sold.

In the Assets/Depreciation section, EDIT the rental property that you have set up as an asset, with details about the sale.

Click this link with more detailed info on How to Report Sale of Rental Property