My business is real estate development, Turbo Tax is trying to make it rental real estate

[AW175]

My business is real estate development, Turbo Tax is making it rental real estate. Under Business Info the type is real estate dev and I have not checked rental.

I sold a property this year that I need to dispose of in Turbo Tax but it was not a rental property. How do I get it to stop insisting my business is rental?

[ColeenD3]

Where are you entering the sale? Did you enter the asset and report the sale on Schedule C? Did you enter the sale in Sale of Business Property?

[Carl]

Turbo Tax is making it rental real estate.

You really need to provide more details on what your business does, and where you're entering things in the program. Also, did you receive any tax forms related to the business? For example, if you received a 1099-MISC with income reported in box 1, then that's passive rental income and the program is treating it correctly.

If it's treating it like rental real estate, then did you start in the Rental & Royalty Income section? Or did the program "take you there" most likely after entering 1099-MISC box 1 income?

Where are you attempting to report the sale of the real estate you sold? Was it raw land? Or land with a structure on it?

[tagteam]

Enter the transaction in the Dispose of Business Property section (unless the property was being held strictly as an investment).

[tagteam]

Also, go back to the Business Info tab and click the Edit button next to Type of business.

Ensure that the "We rent real estate to others" box is not checked.

[AW175]

Property was held strictly as an investment.

[AW175]

We rent to others box is not checked.

[tagteam]

No rental, business, or personal use?

In that event, the transaction would be entered as the sale of a capital asset.

[AW175]

@ColeenD3  This is company is a LLC. I have not entered it because there does not seem to be a screen that applies since Turbotax is convinced my Real Estate Development/ Holding company is a rental company.

[ColeenD3]

There have been a number of suggestions in the thread. I think we need more information, such as what function does you RE Investment company do and what is the relationship between your company and the building sold.

The building is either a rental (you said no), a business asset, or a personal property that is an investment that you sold. Is your business such that you acquire buildings as investment properties?

If your LLC does not have rental properties, then what exactly does it do?

[AW175]

@tagteamNo use, raw land held for resale. Capital gains or losses does not give an option for a real estate sale. Business property/asset disposals says disposal of depreciable assets used in the business. Raw land is not depreciable as far as I know. That leaves all other income which does not allow for basis entry or purchase and sell dates. This company is not a rental company at all so I think if I can figure out why it thinks it is that might solve my issue.

[tagteam]

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@AW175 wrote:

@tagteamNo use, raw land held for resale. Capital gains or losses does not give an option for a real estate sale. 

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@AW175 

If you bought the land with the intention to hold it for resale in the ordinary course of business, you are a considered to be a real estate dealer and the land is inventory. 

If the intention was to hold the property for appreciation (as an investment), then any gain or loss would be a capital gain or loss. There is an option in the program but it is geared toward the sale of stocks, bonds, et al., since they are the most common types of investments.

[AW175]

@tagteamIt was held for appreciation. So maybe if I don't tell it what type of sale it is it will work? None of the types apply.

[tagteam]

@AW175 Just select "Regular Sale of Stocks, Bonds, etc." from the dropdown, enter your description, and then enter the other information about the sale.

Ensure that you check "No" as to whether you received a 1099-B.

[Carl]

You'll report the sale in the Investments section, in Stocks, Bonds, Mutual Funds, Other.