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karen3david
New Member

We are selling our personal residence and 2 rented apartments. How do I use TurboTax to determine the estimated taxes related to this sale?

 
2 Replies
tagteam
Level 15

We are selling our personal residence and 2 rented apartments. How do I use TurboTax to determine the estimated taxes related to this sale?

You can set up a new account (or use an existing account) and start a return for free (which will be for the 2018 tax year).

 

That will, at least, get you a somewhat reasonably close estimate. Just do not file the return, obviously.

Carl
Level 15

We are selling our personal residence and 2 rented apartments. How do I use TurboTax to determine the estimated taxes related to this sale?

This is super-duper basic.

For your personal residence, what you paid for the property plus the cost of any property improvements is your cost basis. Assuming you never used any part of your personal resident for business purposes, subtract your cost basis from your sales price and the difference is taxable income to you. Now if you lived in the property as your primary residence for at least 2 years, of the last 5 years you owned it, then you will qualify for the capital gains tax exclusion on the gain up to a certain amount. If filing single, then the first $250K of gain will be tax free. If filing joint, then the first $500K of of gain will be tax free.

 

For the rental property., what you paid for the property, plus the cost of any property improvements, *minus* all depreciation taken on the property, is your cost basis. Subtract the cost basis from your sale price and that's your taxable gain.

There will be other "little" deductions from your taxable gain also, such as your sales expenses and the such. But this will give you a very rough idea of your reportable gain from the sale so you can use that gain to figure what tax bracket you will be in, for the year you actually sell the property.

WHen you have multiple rental properties to sell, it can sometimes be tax advantageous to "cross tax years" with the sale of each property. For example, close on one rental in December. Then close on the 2nd rental in January of the next tax year.

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