Recapture depreciation on a rental property I sold

[Dan776]

I bought a rental property in 2017 and rented it through 2021. Each year I used TurboTax to handle the rental property income and depreciation.

For 2022, I did not rent it out so when I did my taxes for 2022 TurboTax indicated that I should not enter any information for it. I also did not rent it out in 2023.

I sold it in 2023 and now I can't figure out how to tell TurboTax that I sold it and need to recapture the depreciation for 2017-2021. I have the depreciation data from previous years tax forms.

TurboTax indicates that since I did not rent it in 2023 (or 2022), it's not a rental property.

Is there a way to tell TurboTax that it was a rental property and needs depreciation recapture?

[ThomasM125 · Accepted solution]

You can enter the sale of the property in the Sale of Business Property section that you will find on the screen that says Lets Gather your Business Info. You will see that when you enter into the business section of TurboTax. You will be asked to enter the sales proceeds, cost basis and depreciation allowable on the assets sold. Depreciation entered will be recaptured as ordinary income, with a maximum federal tax rate of 25%, up to the amount of gain recognized on the sale.

[Dan776]

Thanks ThomasM125!!

I calculated the percentage the property was used for rental and entered all the numbers in "Sale of a Business Property" multiplied my that percentage (except the depreciation) and entered the numbers into "Sale of an Investment" multiplied by the percentage used for personal use.

I hope that's right!

Thanks again. You're a lifesaver!