Sale of Rental Property in 2020

[Petrc]

I sold my rental property in February 2020 at a large gain.  Do I need to make a estimated tax payment for 1st quarter 2020?  Do I pay it all in the 1st quarter or prorate it over the 4 quarters.  How do I calculate the estimated tax using the turbo tax and what forms do I need to file with the IRS?

[ReginaM · Accepted solution]

Yes, you can calculate your 2020 estimated taxes and generate the payment vouchers (1040-ES) in TurboTax by doing following these steps:

1. With your tax return open, search for 1040-es (be sure to include the dash) and select the Jump to link.
2. Answer No to the question Do you want to change your W-4 withholdings for 2020?
3. Answer the questions about things like your 2020 filing status, income, and deductions.
4. Eventually, you'll come to the Print Vouchers? screen. Answer Yes and we'll include your 2020 1040-ES payment vouchers when you print a copy of your return later.

[mr1896]

From where (with my 2019 tax return open [it's also filed already]) does one "Search for 1040-es"?

No 1040-es form was generated in list of FORMS IN MY RETURN. Once I learn from you, then, how do I "Jump to link"?

Please, and thank you.

[Carl]

If you just send the IRS 20% of your taxable gain then come tax filing time you'll be fine.

Do I spread the payment out over 4 quarters?

No. If you make $20,000 in the first quarter, you send the IRS 20% ($4,000) in the first quarter.

Then what do I do with the other 3 vouchers?

If you anticipate no gains in the 2nd, 3rd and 4th quarter, you can throw them away.

[mr1896]

Carl, all of the accumulated Rental Property data through 31 Dec 2019 is contained in my 2019 turbotax Premier. I need my program to finalize and close out the 2020 rental property and figure what the taxable gain actually is, figuring everything, including depreciation, etc.. Then I can pay the IRS what's due utilizing the appropriate voucher. HELP!

Please, and thank you!

[Critter]

@mr1896 

HOPEFULLY  you used the 2019 downloaded version and not the online version which will be much more difficult to compute ... so which did you use ?  

[mr1896]

Download / Thumbstick. Thank you.

[Critter]

Wonderful ... let me educate you on something you may not know about that superior program ... using the TEST option you can SELL the rental and adjust your other income to see approximately what your balance due will be in 2020 ....

This is my mini version of  a tutorial  that should be in the downloaded program: 

What is Forms Mode?

Forms Mode lets you view and make changes to your tax forms "behind the scenes."

If you're adventurous, you can even prepare your return in Forms Mode, but we don't recommend it. You may miss obscure credits and deductions you qualify for, and you may forget to report things that will come back and haunt you later.

Forms Mode is exclusively available in the TurboTax CD/Download software. It is not available in TurboTax Online.

Related Information:

• Why would I use Forms Mode?
• How do I switch to Forms Mode in the TurboTax for Windows software?
• How do I switch to Forms Mode in the TurboTax for Mac software?

If you want to play around with different figures and tax scenarios without affecting your original return you can ….

• >>>In the TurboTax CD/Download software by creating a test copy: 
• 1.  Open your return in TurboTax. 
• 2.  From the File menu, choose Save As. 
• 3.  Give the copy a new name to distinguish it from the original (for example, by adding "Test" or "Example" to the file name). 
• 4. Click  Save. You are now safely working in the test copy and anything you do here will not affect the original. 
•  https://ttlc.intuit.com/questions/1900642-how-to-make-a-test-copy-of-your-return

• >>  use the WHAT IF tool: 
• - Click Forms Icon (upper right of screen) or Ctrl 2 (forms view) 
• - Click on the Open Form Icon 
• - In the “Type a form name.” area type What-If (with the dash), click on the name of the worksheet - click on Open Form 
• - You will see the worksheet on the right side of the screen; enter the information right into the form 
• - To get back to interview mode - click on the Step-by-Step Icon (upper right of screen) or Ctrl 1

It's always a good idea to make a backup copy of your tax data file, in case your original gets lost or corrupted. Here's how:

1. From the File menu in the upper-left corner of TurboTax, choose Save As (Windows) or Save (Mac).
2. Browse to where you want to save your backup.
   • Tip: If you're saving to a portable device, save it to your computer first to prevent data corruption. Then, after completing Step 4, copy or move the backup file to your device.
3. In the File name field, enter a name that will distinguish it from the original tax file (for example, add "Backup" or "Copy" to the file name)
4. Click Save and then close TurboTax.
5. Restart TurboTax and open the backup copy to make sure it's not corrupted. If you get an error, delete the backup and repeat these steps.

If you make changes to your original tax return file, repeat these steps to ensure your original and backup copies are in-synch.

Related Information:                             

• Retrieve a Tax File from a Portable Device
• What's the difference between the tax data file and the PDF file?

AND save it as a PDF so you have access to a copy even if you don’t have the program still installed and operational :

• How do I save my return as a PDF in the TurboTax software for Windows?
• How do I save my return as a PDF in the TurboTax software for Mac?

AND protect the files :

• How can I protect the tax files on my computer?

[mr1896]

Perfect! You're a Saint! Exactly what I need! I will work this. Thank you.

[mr1896]

Ok, I am in my own TEST Form WHAT-IF Worksheet. Here is what I am supposed to do:

Step 1: Copy column 1 into column 2 and Check box to use 2020 tax rates. Right?

Ok, so far, column 2 is my Plan 1 for 2020. Simply adjusted for age and new tax rates. Now I need the make the changes.

Step 2: Enter the information right into the form (What-If Worksheet), right? NO. I cannot until the program calculates the new, What-If "Plan 1 2020" information; and, wouldn't the program enter the results in column 2 anyway???

Step 3: Click on Step-by-Step to enter the specifics (so I am supposed to change the 2019 amounts in Schedule C, and activate the new forms for Sale of Rental)… then it calculates all the 2020 Rental Property and Sale in this TEST Return???

Yes I have the original 2019 filed and backed up.

Please, and thank you for your help!

[Critter]

Use the test option first ... sell off the property to see what the bottom line is going to be for the sale.  You can stop there if you like ... the bottom line will be close enough ... OR  you can use that info in the What If option so you can get the 2020 rates.