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sjolyjuly
New Member

Residential property bought June, 1017, remodeled and converted to rental in May, 2018. Sold in 9/2018. Tax treatment of this property?

 
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3 Replies
Carl
Level 15

Residential property bought June, 1017, remodeled and converted to rental in May, 2018. Sold in 9/2018. Tax treatment of this property?

Several questions:
1) Was the property purchased with the intent of it being rental property from day 1 of the purchase?
2) Did you actually rent it out and collect monetary rent while you owned it?
3) What is the earliest date a renter "COULD" have moved in to the property. (This is generally the "available" date asked for by the program)
4) Was there a renter in the property when you sold it?
PaulaM
Employee Tax Expert

Residential property bought June, 1017, remodeled and converted to rental in May, 2018. Sold in 9/2018. Tax treatment of this property?

Check your dates above-I think you mean to say you converted to rental in 5/17 and sold 9/17.

Was the property placed in service and rented May - Sept 2017? 

If so, you would enter the rental in the Rental section with it original costs plus improvements, then dispose of the property. 

If the property was never rented, then it just an investment property and the sale is recorded in the Investment section.

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Carl
Level 15

Residential property bought June, 1017, remodeled and converted to rental in May, 2018. Sold in 9/2018. Tax treatment of this property?

I think all the years are wrong, and off by one. That's why I asked what I asked. Need to determine if this is "in fact" a SCH E property, or if it gets reported as a short-term investment. So far, sounds like short term investment to me, which of course is taxed at a higher rate.

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