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JohnT
New Member

Rental Townhomes Combined for Sch.E, need to separate after selling several individually

My accounting records are separate for town homes purchased in 2002 and combined for entry in Turbotax.  I now need to separate the town homes on the schedule E to reflect the sales of two town homes and carry the remaining ones individually.  Does anyone have experience doing this and can recommend an approach? 

Is there a way to delete the combined group and history from Turbotax in the 2019 tax year?  Then I can reenter all the town homes individually, including depreciation, allowing me to reflect the individual sales?  Will this approach work easily in Turbotax?   

2 Replies
RobertG
Expert Alumni

Rental Townhomes Combined for Sch.E, need to separate after selling several individually

Yes, you can enter all the townhomes individually, including depreciation, to report the individual sales. 

 

You do not need to delete the combined group and history from TurboTax, as long as you do not report the combined group on your 2019 return.  

 

It is better not to combine rental properties on Schedule E for a variety of reasons, including that you have to split them when you sell.

 

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Carl
Level 15

Rental Townhomes Combined for Sch.E, need to separate after selling several individually

Generally, when you combine rental propertys you report those combined rental properties under one single column of the SCH E. In the program, each individual property is listed as a physically separate asset in the assets/depreciation section. If you paid for any property improvements for any one of those properties, then that property improvement will be listed also and you "should" have labeled that property improvment so that you know which specific listed property asset it belongs to.

If you did that, then you really don't need to separate anything. You just report that one specific property asset (and any associated property improvements) as sold, leaving the other property assets and improvements intact.  Since you are only reporting "some" of the assets as sold, that means several things.

1) You will ***NOT*** indicate at the very beginning of the Rental & Royalty Income (SCH E) section of the program that you sold it. (You only do that, if you sold "EVERYTHING" in that group.)

2) Carry over losses in excess of your taxable gain on the sale will not be deductible against other ordinary income. They just continue to be carried over. (You can't "realize" all of your carry over losses until you have disposed of all the properties on the SCH E weather they're grouped or not.)

 

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