Sale of rental property

[AmyC]

The IRS requires that you take depreciation. Since you have not taken it in the past, you can fill out one form to claim it for past years,  Instructions for Form 3115. You must select depreciation and let the program determine what it should have been on the house.

For the improvements you made, add that to the basis of the house when you reach the sales price.

Basis Example:

• purchase $30,000
• $15,000 of depreciation should have been taken through the years.
• Capital Improvements: $60,000
• Basis in property is $30,000-$15,000+$60,000 = $75,000 PLUS expenses of purchase and sale

Appliances are not a capital improvement, replacing those are normal every few years. Here is some information to  help you know what counts. Keep records and pictures for 4 years after the sale.

IRS Pub 527 for Rental Property contains the rules. The IRS has a short, online, anonymous quiz to help with your expenses as well, Is My Residential Rental Income Taxable and/or Are My Expenses Deductible?

@marcost

[glenninma]

I am having the same/similar issue.  I have a condo that I used for personal use for a few years.  For the last many years I have used it as a rental property.  In September 2019 I sold the property.  In the property profile section I indicated that I have sold the property.  I've gone through the "sale of Property/depreciation section".  I've indicated that I"ve sold it.  I've indicated that the business use of the property varied over the time.  BUT, TT never asks me any information about the sales price, etc.  Please HELP.

Some further information.  I notice that after indicating that I sold the property in the Depreciation section that I do get asked additional sales information if I answer NO to the Special Handling Required Screen.

There should be special handing (I think) because my business use of this property varied over the time that I owned it.  How to proceed?

[Anonymous_]

@glenninma You also need to indicate you sold the property in the Property Profile section.

[glenninma]

yes, I did that as well.  I've indicated that I sold the property in the property profile section and in the depreciation area I indicated I sold it and that my business us varied over time.  I still asks me no further questions about the sale.  It seems other are having the same problem.

[AmyC]

Let's get this right:

1. Open up your program for this year.
2. Go to your rental
3. Revisit/Update
4. Rental and Royalty Summary screen
5. Click Edit next to your property
6. In property profile, continue through to Do Any of These Situations Apply to This Property?
7. Mark that you sold the property and click continue until you get back to Review your Rental Summary
8. Look down to Sale of Property/Depreciation, select Update
9. Do you want to go directly  to your asset summary?
10. Select yes
11. Your property assets screen
12. you may have several things listed here, each needs to be disposed of. Let's work on the house. Select Edit 
13. Describe - rental real estate property, continue
14. Tell us more - residential rental real estate, continue
15. Tell us about this rental asset:
16. description - whatever you have had in there for years, continue
17. Tell Us More About This Rental Asset
18. Mark that the item was sold and the date
19. Then mark if it was always business or converted, and the date
20. continue

1. Confirm prior year depreciation and  continue
2. Special Handling Required?  If it was your main home that was converted to a rental, you have all of the depreciation correct, enter NO. If it was always a rental, enter NO. Otherwise, when you answer yes, you go to different areas of the program depending on your situation and you will need to respond with your special situation.
3. Home Sale, answer NO
4. Enter Sales Information

[Cbjiang]

You need to upgrade your TurboTax with rentals and business. In this version, under Business, in the very last line, there is a Sale of Business Property