Hello.
I sold my rental property this year for $160,000 dollars. After the expenses I had a total proceeds of $142,409.16. I paid $125,000 for it. It looks like it is using the entire $142409.16 as taxable income but shouldn't the difference of $142,409.16 and $125,000 be the taxable income?
Karen
When did you purchase this rental property?
Recall that depreciation deductions taken in prior years reduce your basis.
How did you enter the transaction? Hopefully, in the Rentals section of the program.
Regardless, make sure you entered your basis correctly.
I entered it under sale of a business property. So it should be under the "Rental Properties and Royalties" sections?
Also, how do I calculate my basis? I guess I am not sure what you mean by that.
And, thank you for your help.
If you have been using TurboTax in prior years, you should enter the transaction in the Rental Properties and Royalties section.
Your adjusted basis would typically be your cost plus improvements less depreciation deductions allowed or allowable.
I inherited rental property in 2006. I sold it in 2020, how do I calculate my basis? I've been using turbo tax since 2016.
Your basis would typically be the fair market value on the date of death of the decedent but you might want to provide more details.
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 2020". Select it. After you select the "I sold or otherwise disposed of this property in 2020" 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 2020" 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.
I have been searching through all previous answers but cannot seem to find what I need, so sorry if this has been covered before. We purchased our rental in 2008, renters moved out in October 2019 but could not find a buyer until August 2020, depreciation was about 70,000. I managed to handle that however, we purchased for 332,000 and sold for 250,000 so we ended up with a loss. My question is where can I actually enter these figures, turbo tax does not seem to automatically compute or lead to the correct form. Thank you. I already had to start over as I made the mistake of saying I had not rented for all of 2020 so TT deleted everything!
What part of my previous response in this thread is it, that's not clear?
where do I report the sale of a condo that I paid 71000 and put in 11000 of renovations and received 74000
where do I report sale of rental property at a loss?
where do I report sale of rental property at a loss?
Same place you report it at a gain, provided the cost basis of the property is what you paid for it when you originally acquired it.
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.
The property I sold was originally my residence, but could not sell at the time I had to move so it became a rental property. It was purchased in 1980 and sold last year. I did not take any depreciations, it was completely paid for. Been a rental for past 10 years, sold middle of last year. Turbo tax allowed me to record the partial year income. When I go to remove the property, it asks if I want to delete Sch. E and other forms for the property.
Of course, I did not delete anything. Now wondering how to record the sale. It will no longer be in my rental portfolio. Thanks in advance for your advice.
You will report the sale through your rental activity. First it's important for you to understand the the IRS tax law is that depreciation is allowed or allowable, this simply put means use it or lose it. You will be required to reduce your cost basis for any amount of depreciation that would have been allowed whether or not you did take it as a deduction on your returns.
It will be simple to add the assets, however you will need to arrive at your original cost of the home and the land and enter it as an asset in the rental section of your tax return. If there were other assets that were sold such as any capital improvements made in any year after the rental activity began, you will need to enter that as a separate asset with the date they were completed as the date placed in service.
Steps to complete your sale and take advantage of your depreciation deduction that was never previously used.
Lastly, you might consider using a tax specialist for 2021 to help you if you have difficulty with any of the steps after reading the entire answer. You can ask questions as you go along as well.
Use the original cost of each asset listed on depreciation, add those together then divide each one by the combined total to find the percentage of the cost for each asset. Use that percentage times the sales price and sales expenses to find the selling price/sales expenses for each asset.
Example: Original Cost (of each asset on your depreciation schedule)
$10,000 Land = 13.33%
$50,000 House = 66.67%
$15,000 Improvements = 20%
$75,000 Total = 100%
Multiply each percentage times the sales price/sales expenses to arrive at each individual sales price/sales expense.
I hope this example provides clarification to enter your sale.
You need to dispose of the property by telling TurboTax how and when it was disposed of. Follow the instructions below.
You might also review information here.
Form 3115 Instruction: By including this with the current year tax return, you can complete everything on the 2021 tax return.
This must be completed and filed with the return on time.
I cant figure out where to enter the sale of rental property. As in sale price of property, improvements to property and and cost of property?
Go to the rental property section. One of the questions is "Did you sell or dispose of the property this year?" When you answer yes the system will walk you through everything.
When you answer yes the system will walk you through everything.
Actually, not quite. After selecting the option that you sold the property, if you don't read the small print, then you won't know that you need to work through each individual asset in the assets/depreciation section in order to actually report the sale.