Rental property sale, basis?

[dwndrlch]

When I enter my rental property sale, it does not ask me for my basis in the property & land.  Do I enter those in expenses along with the closing costs, etc?
I sent in 20% of my sales minus basis to the IRS when I sold it.  But TT is having me owe 20% on the full sales price.  We have owned the rental 9 years and I've been using TT since that time so I would think it would have the history.

I use the desktop version of TT

[DaveF1006]

The reason TurboTax isn't asking for your basis in a simple "box" is that for a rental, your basis isn't a single number—it's a combination of your original purchase price, land value, and 9 years of accumulated depreciation.

To fix the "20% on the full price" error, you must "retire" the asset. Here are the exact steps for the TurboTax Desktop version:

Step 1: Report the Sale

1. Go to the Federal Taxes tab -> Wages & Income.
2. Scroll down to Rental Properties and Royalties (Sch E) and click Update.
3. Click Edit next to your specific rental property.
4. On the screen "Review Your [Property Name] Info," click Edit next to the Property Profile.
5. Check the box that says: "I sold or otherwise disposed of this property in 2025." 6. Follow the prompts until you are back at the Rental Summary screen.

Step 2: Enter the Basis (The "Assets" Section)

1. This is where 99% of users get stuck. You don't enter the sale under "Expenses"; you enter it under Assets/Depreciation.
2. Scroll down to Assets/Depreciation and click Update.
3. You will see a list of assets (e.g., "House," "New Roof"). You must "sell" each one individually.
4. Click Edit next to the main asset (usually labeled "House" or "Residential Rental Property").
5. Verify the Cost and Cost of Land shown here. This is your Basis. If these are wrong or $0, fix them here.
6. On the screen "Did you stop using this asset in 2025?", select Yes.
7. Enter the Date of Sale.

Step 3: Enter the Sales Price & Closing Costs

1. After entering the date, TT will ask for the Sales Information. 
2. Sales Price: Enter the gross sales price from your 1099-S.
3. Sales Expenses: Enter your closing costs, commissions, and legal fees here.
4. Land vs. Building: TurboTax will ask you to split the sales price between the land and the building. A common method is to use the same percentage as your original purchase (e.g., if land was 20% of the cost, assign it 20% of the sale price).

Step 4: Verify in "Forms Mode"

1. Since you are on Desktop, verify the math immediately:
2. Click the Forms icon in the top right.
3. Open Form 4797 (Sale of Business Property).
4. Check Line 20 (Cost or other basis). If this matches your original purchase price plus improvements, the "full sales price" error is fixed.
5. Check Line 22 (Depreciation allowed). This should show the 9 years of history TT carried over.
6. Note on your 20% Payment: When you sent that check to the IRS, you made an "Estimated Tax Payment." To get credit for it, go to Deductions & Credits -> Estimates and Other Taxes Paid -> Federal Estimated Taxes. If you don't enter it there, TT will think you haven't paid a dime yet!

[dwndrlch]

Okay, I did that.  I guess I just owe that much!! Due to the depreciation I've been taking.  I appreciate your response.

[DaveF1006]

Yes, if the depreciation recapture is significant, that can drive up the tax bill.