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New Member

Where to report capital gains/losses from the sale of the rental property?

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New Member

Where to report capital gains/losses from the sale of the rental property?

The sale of Rental Property is reported under Wages & Income >> Rental Properties. You will need both Form 1099-S and the Settlement Statement (HUD-1) to complete the sale entry. 

·         Sales Price – If you received a Form 1099-S, look in Box 2 (Gross Proceeds), which will generally be your contract sales price. You can also use the gross proceeds amount from your settlement closing statement.

·         Sales Expenses for selling your property include sales commissions, advertising, broker and legal fees, and transfer taxes.

·         Basis is your rental's original purchase price plus settlement costs at time of purchase (abstract, legal, and recording fees, surveys, transfer taxes, owner's title insurance) .

·         Adjusted basis is your basis plus improvements and sales expenses minus depreciation.

If you did not use TurboTax last year, you will need to first enter the property under Assets/Depreciation, then record the sale from the Rental Summary screen.

1.      With your return open in TurboTax, search for rentals and then click the "Jump to" link in the search result.

2.      Answer Yes to the question Did you have any rental or royalty income and expenses?

3.      When you get to Is this a rental property or royalty? select Rental property and fill out the description, address, and owner.

4.      When you hit Do any of these situations apply? you'll definitely want to 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 Rental Summary screen. Here, you can report the sale in the Sale of Property/Depreciation section, along with any other pertinent info (income, expenses, etc.)

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.

As you work through the interview sequence, be sure to check the circle beside "I sold or disposed of this property in 2016". (see first screenshot below). You can revisit that section again if you did not.

At the end of the interview, you should see the Rental Property Summary screen (screenshot #2 below). Click Start next to "Sale of Property" and work through the interview sequence. Be sure you mark the asset as sold with the date of the sale (screenshot #3 below). Here is a list of selling expenses: You may also include the cost of repairs needed in order to close. Repairs prior to listing the property are included under Rental Expenses.

Complete the interview and TurboTax will calculate the Gain/Loss on the sale based on your input.


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