Started renting our primary residence in 2014. We bought a new house. We sold the rental in 2016. We got a check for $46k. Why am I getting money back?

[Coleen3 · Accepted solution]

If you went through the rental section and answered all the questions regarding the sale correctly, the program figures profit or loss from the sale. If you have a loss, since it is a business property, it is deductible. The cash in hand is irrelevant.

The calculation involves cost plus improvements plus sales expenses minus depreciation is your adjusted basis. Sales price minus adjusted basis is gain or loss.