Sale of Rental Property

[Stevenbirn]

I sold rental property in 2019.  I have been using Turbotax since I bought the property and I am trying to input the sale into my return.  I go through the process of having disposed of the property through rental properties and royalties and then I have to also input it through sale of business properties under business items.  It seems like it is counting the gain twice.  Once through rental properties and royalties without reflecting depreciation and then again in sale of business properties reflecting depreciation.  What is the correct way to input the sale?  Thank you

[Carl]

I go through the process of having disposed of the property through rental properties and royalties and then I have to also input it through sale of business properties under business items.

If you enter it twice, then it counts it twice. Why are you entering this sale it in two places?

Typically, you report the sale of rental property in the SCH E section of the program and that's it. However, there are situations where you can't report the sale in the SCH E section and have to report it in the Sale of Business Property section. So why are you reporting it in both sections?

This is not a rhetorical question. From your perspective there is what is to you a "valid" reason you did this. So I'd like to know why. That will better the chances of me giving you the correct information on which sale to delete, as well as how to correctly delete it.

[Stevenbirn]

Thank you for your response.  When I put it through Sch E it does not reflect depreciation, just the gain.  Then it tells me to put it in business sale.  I did get it correct  by not inputting the sale date (as it directed) in schedule E and inputting in business sale.  Then when it did the review at the end it said I left out the sale date under schedule E.  It seems that it gets inputted to sch E for the income and expenses and business sale for the sale and depreciation.

[Critter]

If you had an active rental when it was sold and the rental was reported in the Sch E section of the program then the sale of said rental is completed in the ASSET section of the Sch E section ONLY ... do not report the sale a second time. 

[Stevenbirn]

When I report it in the Schedule E section it does not reflect the accumulated depreciation.  The condo is fully depreciated but it is not reflected in the 4797 and schedule D.

[Stevenbirn]

I am using Turbotax Deluxe for Mac and just tried it again.  If I just input it into Sch E it does not put the depreciation in the Schedule D and 4797.  Any idea why?  Thank you

[AmeliesUncle]

Was the property sold at a gain?

Are you SURE the depreciation isn't showing up on Line 22 of Form 4797 (assuming it was sold at a gain)?

[Stevenbirn]

It was a gain and line 22 is zero.  The only way it seems to work is if I leave the sale date under schedule E blank and put it under business sale.  I tried it in the windows program also and it is the same thing.

[AmeliesUncle]

So just to be clear, when you say "under Schedule E", you mean you are in the rental section in the Step-by-Step interview, and you go into the "asset" for depreciation and you are entering  the sale price there, right?

[Critter]

Correct ... do NOT use the sale of business assets later in the program ... only use the Rental section to sell off the assets listed on your Sch E/form 4562. 

[Stevenbirn]

I go to property asset then to the condo.  I indicate it was sold and then when I get to date sold the instructions say to leave it blank.  If I fill in the sale price then it only shows the gain and does not reflect depreciation.  When I leave it blank then when I get to sale of business property is says it needs review.  When I input the data there the depreciation shows on line 22 of 4797 and schedule D.  I guess that is the way they want it done.

[AmeliesUncle]

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@Stevenbirn wrote:

when I get to date sold the instructions say to leave it blank.  

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That doesn't sound right.  Where does it say to leave the date blank?  Enter the sales date there and see if that fixes your problem.

[Stevenbirn]

When I go to "Your Property Assets" and click on "Edit" under the condominium, it asks me if I stopped using the asset and I respond yes.  Then it takes me to "Disposition Information" where it says to enter the date of sale but then has a note indicating that I may have to make additional entries for this disposition elsewhere in TurboTax, then a "Learn More" link.

Also when I do input the sale date and leave business sale blank the depreciation is not reflected anywhere in the return.

[AmeliesUncle]

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@Stevenbirn wrote:

leave business sale blank .

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Why are you doing that?  When you get to the "Special Handling" screen, are you saying "Yes" or are you saying "No"?  In most cases the answer is "No" and both the sale date and sale price is entered on the following screen.  That should properly report everything on the proper forms.

[Critter]

@Stevenbirn 

If you are using one of the ONLINE versions may I highly recommend you upgrade to the LIVE version to get one on one assistance and progress reviews.