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We have a second home that we allowed a tenant to occupy rent-free Jan-July 2017. We then sold the home for less than purchase price. How do I report this?

 
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Coleen3
Intuit Alumni

We have a second home that we allowed a tenant to occupy rent-free Jan-July 2017. We then sold the home for less than purchase price. How do I report this?

This is a secondary home. The fact that you allowed the tenant to live rent free indicates that it was not a rental for profit.

Report it as below but since it is personal use, you will not be able to take a loss.

Report the sale in the investment section of TurboTax. Follow these instructions:

  1. Open your return in TurboTax.
    (To do this, sign in to TurboTax and click the orange 
    Take me to my return button.)
  2. In the search box, search for sold second home (use this exact phrase) and then click the "Jump to" link in the search results.
  3. Answer Yes on the Did You Sell Any Investments in 2017? screen.
  • If you land on the Here's the investment sales info we have so far screen, click Add More Sales.
  • Answer No to the 1099-B question.
  • On the next screen, select Second Home (choose this also for inherited homes) or Land. Click Continue.
  • Follow the on-screen instructions to completion.
  • Note: Whether you had a loan on the property or how much cash you received at closing doesn't matter to the IRS. The IRS will tax you on the profit from the sale, if any.

    In simple terms, the Gross Proceeds minus Expense of Sale (if needed) minus Original Purchase Price minus Improvements (expenses for new roof, kitchen remodel, etc.) equals Your Taxable Profit.

    TurboTax will ask you all the necessary questions to determine if you have a profit or loss on the sale.

    View solution in original post

    3 Replies
    Coleen3
    Intuit Alumni

    We have a second home that we allowed a tenant to occupy rent-free Jan-July 2017. We then sold the home for less than purchase price. How do I report this?

    This is a secondary home. The fact that you allowed the tenant to live rent free indicates that it was not a rental for profit.

    Report it as below but since it is personal use, you will not be able to take a loss.

    Report the sale in the investment section of TurboTax. Follow these instructions:

    1. Open your return in TurboTax.
      (To do this, sign in to TurboTax and click the orange 
      Take me to my return button.)
    2. In the search box, search for sold second home (use this exact phrase) and then click the "Jump to" link in the search results.
    3. Answer Yes on the Did You Sell Any Investments in 2017? screen.
    • If you land on the Here's the investment sales info we have so far screen, click Add More Sales.
  • Answer No to the 1099-B question.
  • On the next screen, select Second Home (choose this also for inherited homes) or Land. Click Continue.
  • Follow the on-screen instructions to completion.
  • Note: Whether you had a loan on the property or how much cash you received at closing doesn't matter to the IRS. The IRS will tax you on the profit from the sale, if any.

    In simple terms, the Gross Proceeds minus Expense of Sale (if needed) minus Original Purchase Price minus Improvements (expenses for new roof, kitchen remodel, etc.) equals Your Taxable Profit.

    TurboTax will ask you all the necessary questions to determine if you have a profit or loss on the sale.

    We have a second home that we allowed a tenant to occupy rent-free Jan-July 2017. We then sold the home for less than purchase price. How do I report this?

    I failed to include that this same home was used as "rental for profit" prior to this tenant, but has not been for profit since 2014. Does that impact how I report the sale? Apologies for the confusion.
    Coleen3
    Intuit Alumni

    We have a second home that we allowed a tenant to occupy rent-free Jan-July 2017. We then sold the home for less than purchase price. How do I report this?

    You will have to recapture the depreciation you took while it was a rental. There should be a place to include it.
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