Sold rental property

[ArmyZebra]

My husband and I stopped renting out our rental property in Oct '24. Claimed that part on our taxes for 2024. Listed for sale the same month and sold in early '25.  We did not have it rented at all in 2025, but that is when it sold.  I have clicked the option that we sold the property, but when I go through and try to enter any other info, I'm being told that since it wasn't rented at all in 2025 that I should just delete the rental.  If I do that though, where would I enter the info that the property sold?

[ThomasM125 · Accepted solution]

On the screen that says Was this property rented for all of 2025? you should click the box that says No, this property was not rented all year.  However, do not check the other box that says I did not rent or attempt to rent this property in 2025. Then, go to the depreciation section and mark each asset as being sold by allocating a portion of the purchase price to each asset until each one is marked as sold.

[ArmyZebra]

This does look like the way to fix my problem, I just didn't realize now that the required form for this is currently not ready. Thank you for your help!

[CatinaT1]

The work on this section of TurboTax is continuing and expected to be completed with an update coming after Thursday night (2/19).  The best time to check for a change will be Friday (2/20).

[superwario]

I just tried all the steps and there is no option to enter any Sales price inforation for a Rental Home that I sold.  Are there more updates coming?

[DaveF1006]

Try these steps to see if this works for you.

1. Go to Rental Properties and Royalties and select Edit on your property.: Ensure you have checked the box "I sold or disposed of this property" in the Property Profile section. 
2. The Asset Link: Scroll down to the Assets/Depreciation section and click Start/Update.
3. Edit the Asset: You must click Edit on the actual "House" or "Structure" asset.
4. Proceed through the screens until you see: "Did you stop using this asset in 2025?" Select Yes.
5. Disposition Information: Enter the date sold.
6. Sales Information: This is where the sales price and sales expenses should appear. 

[Mjtkreilly]

Thank you for initial answer. I have similar situation rental property condo for 2022 through 2024 then stopped , listed it for sale and sold it in 2025. How do I answer tell us more about this rental asset screen especially bottom section about yes or no on using this item 100% for business use. Depreciation for 2025 should be zero.

[Mjtkreilly]

Follow on my last question, if I answer yes, it calculates depreciation for 2025 when it should be zero.

if I answer no, it does not allow me to enter zero for business use in 2025.

[PatriciaV]

Since you stopped using this property in a prior tax year, you would report this in TurboTax as the Sale of Business Property. Be sure you have the final amount of depreciation taken on the property through the date you stopped using it as a rental. Your entry point will depend on the version of TurboTax you are using.

If you're using TurboTax Online, log in and open your return. Then use this link: Sale of Business Property.

If you're using TurboTax Desktop, open your return, go to Your Income Summary (or Business tab) and find Sale of Business Property under Business Items (Less Common Business Situations).

1. On the page "Any Other Property Sales?" check the box for Sales of business or rental property that you haven't already reported.
2. Add a sale.
3. Complete the Sale of Business or Rental Property page. 
4. Cost should include your final adjusted basis plus any selling expenses.
5. Enter depreciation from your records.
6. For the question "What type of property is this?" check the box for "Real Estate that I took depreciation on."
7. Continue through the topic until you return to the Income Summary page.

These entries will be reported on Form 4797 and no current depreciation will be calculated for the property.

@Mjtkreilly 

[Mjtkreilly]

Thank you, Patricia.

I am not using the sales of business property since the 2025 apartment sale resulted in  a section 1231 loss. So I am in the sale of property/depreciation section for the rental real estate property.

All the calculations seem to be correct (asset sales, costs, expenses, and prior years cumulative past passive losses and cumulative depreciation, etc.) except TT is calculating depreciation for 2025 until the date it was sold and depreciation should be zero since it was not a rental or offered for rent in 2025. I indicated in TT it was rented for zero days and zero days for personal use.

The unit was rented out  for 19 months  continuously from later 2022 through 6/1/2024.

In 2024 TT software , I indicated that unit stopped being a  rental on 6/1/2024. Later in 2024 the unit was listed for sale, and was sold it in 2025 never been used for personal use during that period.

I have unsuccessfully tried many combinations of the step by step instructions even clicking yes for special handling which did not help. 

I have been continuously using TT desktop home & business for many years.

I hope you and your colleagues can help me.

Thank you.

[DianeW777]

Yes, we can help. The sale reported inside the rental activity will calculate depreciation up to the month of sale. Your information indicates you did not convert it to personal use in 2024 when it was removed from service which would have removed it from your tax return for 2025. Review the information below and then decide the easiest way for you to complete your return.

In your scenario, you can enter a date of 01/01/2025 in the date where you select 'This item was sold……'. This will limit the depreciation to only one month for 2025. If you choose, you can say 'Yes' to Special Handling'  and then use Sale of Business Property as indicated by our tax expert @PatriciaV. The only way to fully stop depreciation from your date of 6/1/2024 is to remove the assets in your rental activity (delete them) as long as you know the full depreciation used for the 19 months and details for the appropriate entries in Sale of Business Property.

As you indicated you still need to be able to use your passive losses in full in the year of sale and this will take place with either option you choose because it must come through the rental activity section which is active in your 2025 tax return.

The best option for less detail on your part, is to continue with the sale information inside the rental activity with the date suggested even though it was sold later in 2025. This will allow a lower amount of depreciation than you currently see and a sale that occurs in the correct tax year.

@Mjtkreilly 

[Mjtkreilly]

My thanks to both of you

[jimsack]

I clicked the second box and all the previous year's depreciation was lost.

Is there a way to recover that information?

[jimsack]

I sold my property without renting in 2025, but deleted, inadvertently, all the previous depreciation information.  Can it be recovered?  

[ThomasM125]

You can't recover the depreciation in the current year TurboTax, but you can go back to the previous year return and find the Depreciation and Amortization Report. Using that report, you can add the prior and current year depreciation together to get the accumulated depreciation that you can use to report the sale of the building.

You will see an option to print out your prior year tax return, including the worksheets, on your home page when you log into TurboTax. 

You report the sale in the business section of TurboTax, on the screen that says Let's gather your business info. Find the Less Common Business Situations menu and choose Sale of Business Property. 

@jimsack