I bought a property in 2007 for $500,000 and sold it in 2022 for $425,000. I rented this property in 2022 for a few months (2 months x $2000) and the renter bought it. It did not generate any rental income prior to 2022. Can this be treated as a Section 1232 loss where I could reduce my taxable income by $75,000?
Yes, it will be treated as Section 1231 loss . The rental income and expenses attributable directly to the rental period will be reported under the rental income using Schedule E. The rental property itself cannot be listed as a depreciable asset in the rental activity section because you cannot depreciate property that is placed in service and removed from service in the same tax year.
However, the sale will be reported as follows in TurboTax.
Yes, it will be treated as Section 1231 loss . The rental income and expenses attributable directly to the rental period will be reported under the rental income using Schedule E. The rental property itself cannot be listed as a depreciable asset in the rental activity section because you cannot depreciate property that is placed in service and removed from service in the same tax year.
However, the sale will be reported as follows in TurboTax.