How do I enter the Sale information for a Rental Property Fixed in 2019 and Sold in 2020 in Turbotax

[JMP5]

How do I enter the Sale information for a Rental Property that I bought in 2006  for $179,900 + fees = $185,878 and started renting in 2009 until 2020. I sold the rental property for $173,000 and paid ~$1000 fees. I still owe $151,1111 mortgage loan.

TurboTax Sales Information ask for

Asset Sales Price

Asset Sales Expenses

Land Sales Price

Land Sales Expenses

How do I account for the $151,111 mortgage loan? Is this part of the Asset sales expenses?

Thanks

[Critter-3]

The mortgage payoff is immaterial when selling a rental so there is no place for it in the asset section.  If you have the asset properly added in the past and have been depreciating it correctly then just follow the screen instructions. 

[MaryK4]

The mortgage amount is not needed for the report of the sale because the mortgage is paid off with the proceeds from the sale of the house.  While you were renting the property, you deducted the interest paid so it was like a free loan.

[Carl]

Here's the general guidance on reporting the sale of rental property. Note that your mortgage payoff amount just does not figure into this, as it's not tax deductible or anything of that sort.

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).

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.

[mle4]

I have similar situation I need guidance with. I bought my rental in 2006 for 360k and sold it in 2020 for 405k. I stopped renting it in Aug 2020 so I could make the repairs to be able to sell it. I put about 70K into it so it could sell. Where do I put the 70K I put into the property to sell. Do I put it as asset sales expenses. I tried to put it in as an added asset but it didn't change my taxes at all. I don't want to put it in the wrong spot and cause a red flag, I have been reading 100's of notes on here and I am still not clear what to do. 

[AmyC]

@mle4  You can't depreciate items placed in service the same year as the sale. You will need to add those expenses to the basis.

Basis = 360k - depreciation allowed +70k

Be sure to go through every asset listed and sell everything for zero except the house.

[Critter-3]

In the TT program, when selling a rental, adding the improvements to the basis is awkward at best so just add them to the Sch E as a repair expense and you will get the proper deduction for the same year non asset expense.   Adding it to the basis of the property will  not work to keep it a short term situation even if you could figure out how to do it in the program.