Sell of rental property

[Carl]

I'm not sure my memory is correct on this. So feel free to check me on it. In a case where you have multiple rental properties and you only sell one, the losses from all rental properties will be used to offset any gains on the one sold. Understand those losses do not include depreciation on the unsold properties.  Any remaining losses continue to carry forward, as you can't claim losses against "other" ordinary income until you sell all like-kind rental property.

By "like kind" I mean the two types of rental property.

Residential rental real estate, depreciated over 27.5 years.

Then there's Commercial rental real estate depreciated over 40 years (30 years if place in service after 2017).

[tagteam]

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@cc11jimmy wrote:

What's weird to me is that the other income (loss) is exactly -43,000 instead of -31,000. It seems system used $12,000 of carried forward loss from another rental property which is not sold. 

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Look at Part II of your Form 8582. Unless you are subject to the phaseout due to your MAGI exceeding the limit, the program may have taken advantage of the $25,000 special allowance.

See https://www.irs.gov/publications/p925#en_US_2019_publink1000104575

[AmeliesUncle]

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@cc11jimmy wrote:

Is that intended? I thought only the one sold can release the prior losses in the year it was sold. Where could I screwed up?

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Passive Losses can be used against Passive Gain.  So if you sold the property at a gain, 'other' passive losses can be used to offset that gain.

[cc11jimmy]

Unfortunately, it was phased out. so prob not that.

@tagteam 

[cc11jimmy]

Thanks, even if they are different properties? I'm also phased out of the 25,000 deduction allowed. Thanks.

@AmeliesUncle 

[AmeliesUncle]

Yes.

[msmarci2]

Hi - 

I sold my rental property in March 1, 2019. I have questions on how to exactly enter the information on Basic TT.

I sold rental condo for $335,000.

Expenses for sell were $33,198.

It have been too long to claim the "lived in there,"

Original Purchase Price $180,000 (not sure on closing costs from then), Land said $70,000. not sure why when it's a condo.

Depreciation $34,500,

No improvements, 

When sold rental, I did make a gain on the property.

Also, I'm a single mom, low income.

1st -  I'm in the rental sales information section, it only says the following. Please tell me what to put here on basic TT.  

Asset Sales Price                    

Asset Sales Expenses             

Land Sales Price

Land Sales

Please give me the exact number (not words) to tell me what to do. 

I did pay $11,156.00 in Withholding: Franchise Tax Board at the time of closing. I have a CA forms 593 and 593-V. Do I have to attach this too? or is it done?

I have form 1099-S proceeds from real estate transactions ($335,000.00). Attach this or done?

2nd - Do I have to anything else, like Capital Gains, 

I have never sold a rental property before.

Thank you so much!

[rcarotenuti]

I am following the directions for sales of y rental properties exactly as you stated.  BUT, when the sale results in a capital loss, I get a screen saying that it does not belong here and Turbo Tax deletes the entry.  And the resulting reduced tax (due to the loss) goes back up.  Where am I supposed to enter rental property sales if they result in a loss, if not here?!

[Anonymous]

I sold my rental property in March 1, 2019. I have questions on how to exactly enter the information on Basic TT.

I sold rental condo for $335,000.

Expenses for sell were $33,198.

It have been too long to claim the "lived in there,"

Original Purchase Price $180,000 (not sure on closing costs from then), Land said $70,000. not sure why when it's a condo.

Depreciation $34,500,

are all those sales cost related to the cost of selling the property.  real estate taxes, HOA fees, balance due on mortgage, proration of interest due, and certain other expenses are not selling expenses but are reported on the rental income schedule

easiest

asset sale price of building = 335,000 times cost of building divided by total purchase price

asset sale expenses of building = sales expenses times cost of building divided by total purchase price

asset sale price of land =  $335,000 less amount allocated to building

asset sales expenses of land = sales expenses less amount allocated to building

if done right the land portion will appear on form 4797 part I and the building will appear on 4797 part III

since there should be a gain this will flow in total to schedule d line 11

[Matche87]

Would Washington State Excise Tax be considered a Sales Expense for the purpose of reducing my cost basis on the same of my rental property?

[ColeenD3]

Although excise taxes cannot be deducted on your tax return, they can help reduce the value of the sale itself. In fact, excise taxes can be subtracted from the final sale price when listed on your tax return.

WA Excise Tax

[condryk]

Thank you.  Can you tell me where I can report the expenses

[DianeW777]

Yes.  the excise tax paid at the time of sale will be considered as part of your sales expenses. When you reach the screen that asks for the selling price you will also be asked to enter the sales expenses.

If you have more than one asset (more than the house or rental unit) you must prorate the selling price and selling expenses between the assets.

Prorating sales price and sales expenses: Use the original cost of each asset listed on depreciation, add those together then divide each one by the combined total to find the percentage of the cost for each asset.  Use that percentage times the sales price and sales expenses to find the selling price/sales expenses for each asset.

Example:  Original Cost (of each asset on your depreciation schedule)

$10,000 Land                = 13.33% 

$50,000 House              = 66.67%

$15,000 Improvements  = 20%

$75,000 Total                 = 100%

Multiply each percentage times the sales price/sales expenses to arrive at each individual sales price/sales expense.

I hope this example provides clarification to enter your sale

[bigdog3]

When entering sale of rental properties through the "Rental Properties and Royalties" section in the Premier edition, it does not ask for Form 1099-S information.

Should Form 1099-S information be entered somewhere else?

[AmyC]

You mark that it was sold in the general information section and again in the asset section.

It should ask for the sales price. That should match the 1099S. In the rental section, you mark that you disposed of the property. You must dispose of every asset, all for $0 except the house, which matches the 1099-S.

You mark that it was sold in the general information section and again in the asset section.