Sale of Rental Home

[gjhinton25]

I own 2022 TurboTax Premier/Desktop.  I've done my taxes with TurboTax for many years, always successfully.  This year I sold a second home that I owned for about three years as a rental property.  I know this sounds "stupid"...but I'm not seeing where I enter the information from this sale within the TurboTax software!  I searched the "Community Questions" and they seemed to indicate that I should be able to enter this within the "Rental Property and Royalties" sub-section of the "Wages and Income" section of the software.  When I initially edit this sub-section I list my property and indicate that it was "sold" this tax year, but I'm not subsequently getting any prompts to enter any information relevant to this sale (sale price...original purchase price...etc.).  I do get all the prompts to enter "expenses" for this year for the rental which I've done.  What am I not doing here?  HELP??

[PatriciaV · Accepted solution]

Rental Property sales are entered in two places under Rental Properties.

1. Open your return and go to the Rental and Royalty Summary page. Click Edit beside the property you sold.
   (If you didn't report this property last year, you'll need to complete all the interview questions, including setting up the asset(s) for depreciation.)
2. Click Update beside the Property Profile.
3. On the page "Do Any of These Situations Apply?", click "I sold or disposed of this property." A message will pop up to say you'll enter the details of the sale under the depreciation section.
4. Continue through the screens to the Property Rental Summary page.
5. Click Start/Update beside Sale of Property/Depreciation.
6. Go directly to your asset summary and click Edit beside the rental asset you sold.
7. Continue to the page "Tell Us More About This Rental Asset" and check the box for "The item was sold..." Enter the date of the sale in the pop-up box.
8. Follow the prompts to enter the sale information.
9. Continue back to the Property Summary page. Click Done and answer any follow-up questions.

[Carl]

Here's the guidance.

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  2021". Select it. After you select the "I sold or otherwise disposed of this property in 2021" 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 if it's zero. Then you MUST work through the "Sale of Property/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 on some assets. Likewise, if you sold at a loss then you must show a loss on all assets, even if that loss is $1 on some assets.

Basically, when working through an asset you select the option for "I stopped using this asset in 2021" 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.