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brizzobry
New Member

We sold a rental property that wasn't rented in 2016. Now what?

Here is the background..

We used this property as a primary residence from 2005 to 2010. In 2010, we moved and began renting this property. By the end of 2015, we listed it for sale and had no renter. It sold in March of 2016 and had no actual rental income during the 2016 year.

1) how do we handle this in turbotax?

2) how do we handle past years that we filed as a rental income with depreciation

3) where do we handle the mortgage interest?

4) we took a loss on the sale. does that matter?

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2 Replies

We sold a rental property that wasn't rented in 2016. Now what?

One issue is whether or not the rental property was "in service" up until March 2016, that is, would you have rented the house if a renter had come along?

If so, then the property is still considered a rental in early 2016, and you would continue to deduct expenses like depreciation and mortgage interest even though you had no income for those three months. These items would show up on Schedule E, like in years before.

If, however, the property was no longer "in service", then you could choose to consider it a "second home" for 2016 (especially since you had lived in it once). In this case, the mortgage interest (subject to limits) and the property tax could be reported on Schedule A, along with the same items from your main home.

In any case, you are not eligible for the $250,000/$500,000 sale of home exclusion because you had not used it as your residence for 2 of the last 5 years. Either way, this is the sale of a business property.

For information on how to report this in TurboTax, please see https://ttlc.intuit.com/questions/1933977-i-sold-my-rental-property-how-do-i-report-that.

brizzobry
New Member

We sold a rental property that wasn't rented in 2016. Now what?

still not really sure where to report this. It doesn't seem to let me report it anywhere.
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