Sale of ex-rental
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New Member

Sale of ex-rental

Rented a house from 2006 through part of 2018.  Stopped renting in 2018, fixed it and sold it in early 2019.  Where or how do I report the sale and determine the basis?

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Level 15

Sale of ex-rental

did you transfer in 2018 tax data?  does it show the rental property?   the just enter sales info there.  indicate 0 rental days.  0 personal use 

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Level 15

Sale of ex-rental

If you did not live in the property for one single day as your primary residence, 2nd home or vacation home between the time the last renter moved out and the closing date of the sale, then the property remains classified as residential rental real estate when imported in to your 2019 tax return.

Do not, under any circumstances and with no exceptions, select the option for "I did not rent or attempt to rent this property in 2019". If you select that option, then you will be *FORCED* to delete the SCH E from your 2019 tax return.

Additionally, since your rental income for 2019 will be ZERO, do not bother claiming rental expenses for 2019. Besides, any expenses incurred in 2019 are most likely sales expenses anyway.

Reporting the Sale of Rental Property

If you qualify for the "lived in 2 of last 5 years" capital gains exclusion, then when prompted you WILL indicate that this sale DOES INCLUDE the sale of your main home. For AD MIL personnel who don't qualify because of PCS orders, select this option anyway, because you "MIGHT" qualify for at last a partial exclusion.

Start working through Rental & Royalty Income (SCH E) "AS IF" you did not sell the property. One of the screens near the start will have a selection on it for "I sold or otherwise disposed of this property in  2019". Select it. After you select the "I sold or otherwise disposed of this property in 2019" you continue working it through "as if" you still own it. When you come to the summary screen you will enter all of your rental income and expenses, even it it's zero. Then you MUST work through the "Sale of Assets/Depreciation" section. You must work through each individual asset one at a time to report its disposition (in your case, all your rental assets were sold).

Understand that if more than the property itself is listed in your assets list, then you need to allocate your sales price across all of your assets.  You will only allocate the structure sales price; you will NOT allocate the land sales price, since the land is not a depreciable asset.  Then if you sold this rental at a gain, you must show a gain on all assets, even if that gain is $1. Likewise, if you sold at a loss then you must show a loss on all assets, even if that loss is $1

Basically, when working through an asset you select the option for "I stopped using this asset in 2019" and go from there. Note that you MUST do this for EACH AND EVERY asset listed.

When you finish working through everything listed in the assets section, if you ever at any time you owned this rental you claimed vehicle expenses, then you must also work through the vehicle section and show the disposition of the vehicle. Most likely, your vehicle disposition will be "removed for personal use", as I seriously doubt you sold your vehicle as a part of this rental sale.

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