Questions about depreciate, after sale of rental property

[derelict]

I've been renting out a house since 2019, and have been claiming depreciation every year (2019, 2020, 2021, and partial in 2022).  I used TT Premium every year for taxes, and the depreciation is shown on Schedule E for each year.
I sold the house in September of 2022.
I'm using TT Premium, and am trying to enter relevant data for the sale of the house, but am *very* confused by what I'm seeing in the program.  I don't see anywhere where the previous years' depreciation are mentioned, but I'm pretty sure I have to pay taxes in some form on all those depreciation amounts, once I sell the house, yes??
Sadly, their help really isn't helping much...
Under 'Review Information', it shows the info that I previously entered, and 'Prior deprec.' is shown as 0 ...
Do I enter the previous years' depreciation there??
I *did* read in my previous year's data when I started my return, should TT know these things??

// peripheral question:
I've been reading various related threads here, and the term "depreciation recapture" is sometimes used... is that the term for what I'm asking about here??

[HelenC12]

Yes, you'll have Depreciation Recapture and TurboTax will ask you to confirm your Prior Depreciation. As you go through the Rental Sale interview, TurboTax will ask you to confirm prior depreciation. The amount of prior depreciation will be shown. It should not be 0..

• Depreciation expense is an item that landlords may not know about and the fact that when you sell your rental, you have to claim all the previous years’ depreciation expense. This is called Depreciation Recapture and it's taxed in the year of sale.  You may have to pay 25% on your depreciation recapture. See IRS Publication 544 Chapter 3 Depreciation Recapture, page 27.

In TurboTax, you have to indicate you sold the rental property in both the Property Profile section and the Assets/Depreciation section of the program. You will be prompted to enter sales information during the interview in the Assets/Depreciation section of TurboTax. 

Please see: I sold my rental property. How do I report that?

[derelict]

Are the screens in your program, from TurboTax Premium for Windows 2022 ??

I'm wondering because *none* of the screens that you show, appear anywhere in the software that I am using....
There *is* a field for 'Prior deprec.' on the Review Information window, but entering a value there does *not* result in any questions about whether that depreciation is correct.  Also, the Search function does *not* turn up anything when searching for Property Profile, and I still cannot find anything by that title in this program...

[DaveF1006]

It depends. Here are some suggestions that may address the issue.

1. When you access the rental property section in your return, you will reach a page that asks Do Any Situations Apply to This property? Here you will will check the box i sold or disposed of the property in 2022. it mentions the depreciation section will appear later in the interview.
2.  Once you entered the property profile, you should reach a summary page.  Select Sale of property and Depreciation.
3.  The next section will ask if you have assets that can be depreciated.  Here you will say yes.
4. Continue through the screens until it asks you to describe this asset. Here you will select Rental Real Estate Property.
5. Continue throughout until you reach a page that says Tell us About the Rental Asset.  Here you list things like and then cost of land. Also, mentions the date that you sold the property.  The data entered in this section will determine the prior depreciation of the building.
6. Next screen will ask if you have used this 100% of the time since you owned the building. This also plays a factor in determining prior depreciation that needs to be reported. 
7. Now if everything is entered in such as way i previously described, you will reach a screen that looks like this screen shot.  In my scenario, i do have prior depreciation added. If your screen shows 0, you have more work to do as you may have missed a step.  Here is the screenshot.

@derelict 

[derelict]

Wow, that's just amazing... I see that your image is labeled TurboTax Premium 2022... but it looks *NOTHING* like any screen that I ever see in this program!!! 

Once I select 'Edit' on the Your Property Assets page, I get Review Information, shown below...
That is the *only* page which ever displays *ANY* field for depreciation!!  I have *never* seen the dialog that you show, asking about Prior Depreciation !!  How do you get to that display??
After Review Info, I get:
Dis you stop using this asset in 2022?  answer: Yes
Disposition Info: I entered the data of sale and date acquired
Special Handling Required: this leads to a lengthy set of following screens, but NONE of them ask me about depreciation... and NONE of them are labeled Property Profile, which several people have mentioned!!! 
This is *really* baffling...

[PatriciaV]

The screenshots posted by Experts HelenC and DaveF were made using the Online or Desktop versions of TurboTax. It appears you are using the mobile version. You may find the screens in TurboTax Online easier to navigate for this complex rental sale. It's easy and free to switch. Just use a laptop or desktop browser and log into https://myturbotax.intuit.com/.

[Carl]

There are some questions that are not being asked here, which means assumptions are being made. Those assumptions could be wrong, which would result in you being provided confusing information. So here's my assumptions and correlated responses based on those assumptions.

- I assume you are using the CD/Desktop version of TurboTax. (what flavor doesn't matter, as the screens will be the same.)

- I assume you are reporting this sale in the Royalty & Income (SCH E) section of the program.

Understand that the program (not you) will take care of depreciation recapture "for you", in the background, and will therefore not "bother you" with the details. Once all data is entered and you have completed the program in it's entirety, you should review the form 4787 and SCH D.  The 4787 is where you'll see depreciation recapture information and details.

Further assuming my assumptions are correct, here's the guidance on reporting this sale. I call it "guidance" because I wrote it using the Cd/Desktop version of the program. While it applies to both desktop and online, some menus with the online version will differ from the CD version that I used when writing the below.

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  2021". Select it. After you select the "I sold or otherwise disposed of this property in 2021" 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 2021" 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.

[derelict]

Well, no, I'm using the desktop version of TurboTax Premium 2022, on Windows 10 Pro

[Carl]

I'm using the desktop version of TurboTax Premium 2022, on Windows 10 Pro

As I stated, I wrote the guidance using the Cd/Desktop version of the program. What @DaveF1006 was showing you, was screen shots from the online version. So it's no wonder you were confused. Both of us assume you are reporting the sale in the SCH E section of the program, however.

[derelict]

Okay, after @Carl recent message, I think I have this figured out...
Schedule D *does* show the prior depreciation... apparently when I entered the value in that Review Information screen, TT was satisfied and ran with it... Form 4562 also shows correct information...

So the basic source of my confusion was that I didn't  think to look at the forms and see what they were calculating!!
So I think my issue has been resolved; I thank all of you for your assistance, and especially the last message from @Carl , which clarified many things for me!!