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myhanhsj
New Member

Where do I put the costs to remodel and repair of a rental property paid to market and sell it? I'd like to offset the gain on sale by the costs to sell.

I put the rental property on the market for sell 2016. I need to repair the septic system, so I put it on Sept 2016, and repaired the electrical, plumbing, water heater, gutter, and remodel kitchen and bathroom from March - Sept 2016. The property sold on Oct 2016. Where do I put all the cost?

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3 Replies
myhanhsj
New Member

Where do I put the costs to remodel and repair of a rental property paid to market and sell it? I'd like to offset the gain on sale by the costs to sell.

using the 'search box' and entering 'selling expenses' does not work. Using the guided forms, no selling expenses is ever encountered.
PatriciaV
Employee Tax Expert

Where do I put the costs to remodel and repair of a rental property paid to market and sell it? I'd like to offset the gain on sale by the costs to sell.

Some terms cannot be searched directly. The screenshot in revised answer below appears during the interview for the sale of rental property (under Sale of Property/Depreciation from the Rental Summary screen).
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PatriciaV
Employee Tax Expert

Where do I put the costs to remodel and repair of a rental property paid to market and sell it? I'd like to offset the gain on sale by the costs to sell.

It depends on the status of your Rental Property while you made repairs before it was sold.

If the property was available to be rented while you made repairs (even if you had listed the property for sale), you would report repair cost under Rental Expenses.

Upgrades that restore the property (including new wiring, A/C, adding a garage, etc.) are considered Improvements that are Rental Assets that would normally be depreciated. Because you placed these improvements into service the same year you sold the property, you will receive no depreciation expense.

However, if the property was not available to be rented (or you had no plans to rent it again), any costs for repairs or improvements that you incurred before you listed the property increase the basis of the property and should be entered as a separate Rental Asset (improvements). Again, no depreciation expense in the year of the sale.

Any repairs needed in order to close the sale may be included in Selling Expenses (see screenshot below - click to enlarge).

The easiest way to find any section of TurboTax is to use the Search box at the top right side of the TurboTax header. Click on the magnifying glass, type in the topic you need, hit Enter, and click the "jump to" link to go directly to beginning of that topic.

Additional Information:

[revised 4/5/17 to add screenshot]

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