Where to enter sale of vacation home/rental?

[locij]

Our primary for years became a vacation home for years  which we then rented out for 2019- early 2020  and sold in 2020. When working through the business section for rental property asset, answering yes to "did you stop using this asset", the next question regards special handling. Since this asset wasn't always a business use I answer yes. Question: Do I Not enter sale information in the Business section and instead enter in the Personal->Investment income->Other section? The business section did not ask fo anything other than the sale date. Thank you.

[ColeenD3 · Accepted solution]

You enter it in the Rental section. Include all your rental details for the beginning of 2020. When asked, state that you sold it.

You will be able to enter all the particulars such as basis, selling expenses and sales price. The program will calculate the gain and place it on Form 4797.

1. With your return open in TurboTax, search for rentals and then select the Jump to link in the search result.
2. Answer Yes to the question Did you have any income from rentals or royalties?
3. When you get to What are you here to report? select Rental property and fill out the description, address, and owner.
4. When you hit Tell us about your situation this year check the Sold box along with any other boxes that may apply.
5. Continue following the onscreen prompts to enter info about your rental property. Eventually, you'll get to the Review your rental property info screen. You can report the sale in the Expenses/Assets (Depreciation) section, along with any other pertinent info (like income and expenses)

Tip: Take your time and pay close attention. There's a lot of info and it's easy to miss if you're in a hurry.

[locij]

So I am still stuck at the question "Special handling required?". One of the criteria for selecting "yes" is "the business use percentage of this asset varied during the years you owned the asset." My answer to this would seem to be yes as the Home(asset) was only used for rental (business) for 1.5 years out of 21 years owned. If i select "yes" I cannot enter the sale in this section. If I select "no" I am asked to put in the sales information. The "Business portion" pop up gives this:

Business Portion

If you used the asset 100% for this business, enter total amounts here. If you used the asset for any other purposes, you must allocate the total amount to the percentage of use for this business.

For example, if you used this asset 75% for this business and you sold the asset for $1,000, then you would allocate the sale price as follows:

Total sales price ($1,000) X business percentage (.75) = business portion ($750).

Allocate sales expenses in the same manner.

You must also report the sale of the other portion of the property in the appropriate section of the program.

If your business-use percentage of the asset varied during the course of your ownership, enter only the disposition date here. Report the sales information in another section of the program by selecting Topic List in the toolbar at the top of the screen. Scroll to the Income category, then choose the Other Income topic.

The time of ownership of the asset used for business purposes was 7% (1.5 years of 21 years). Do I then enter that percent of the sales figures here and then the balance in the "other income" category? I also do not understand the "enter only the disposition date here" instruction. 

Thanks for your patience and assistance.

[ColeenD3]

When you say vacation home (became a vacation home for years), was there personal use once you began renting? If not, it was not a vacation home (The time of ownership of the asset used for business purposes was 7% (1.5 years of 21 years). If it was a straight rental, no personal use during the time of rental, do not call it a vacation home and there is no special handling.

[locij]

Thank you I think that helps clear some things up. So if i understand correctly there is no special handling because the asset was only used as a rental from the time it was converted to a rental till it was sold. And thus when entering the sales information for asset and land prices, the business portion referenced would be 100% of the sales price correct (since the asset was a strictly business purpose at time of sale)? Thanks so much for your help this was complicated for me!

[gloriah5200]

Yes.