An investment rental property was sold in early 2024 in Delaware. No rent was collected in 2024. We are in the State of NJ. What Federal forms should we fill out?

[aka_chao]

It's Passive not a Business.

[AmyC]

Rental property goes on Sch E. You will need to revisit the form and mark the asset disposed of by sale. Any other items being depreciated will also be marked sold for $0. This could be a refrigerator or office blinds. Here are the key forms you may need:

1. Form 4797: This form is used to report the sale of business property, including rental properties. You'll report the details of the sale, including the selling price, adjusted basis, and any depreciation recapture.

2. Schedule D (Form 1040): If you have a capital gain or loss from the sale of the rental property, you'll report it on Schedule D. This form summarizes your capital gains and losses from all sources.

3. Form 4562: If you claimed depreciation on the rental property, you may need to complete this form to report any depreciation recapture.