I rented a property until May 2018. I sold that property August 2018. Where and how do I report the repair expenses? How far back do I report the Depreciation?

[IreneS]

Are you using TurboTax online or the CD/Download version?

[jubaldridge]

yes

[IreneS]

which one -- online?  or CD/Download?

[jubaldridge]

online

[IreneS · Accepted solution]

You report the sale of a rental property on Schedule E.  To do this you need TurboTax Premier or above.

Repairs

The general rule is that the cost of repairs incurred to maintain your rental properties may be deducted from each property's taxable income in a given year.

However, some repairs are considered improvements (for example a new roof or new kitchen cabinets), which are added as an asset and depreciated over time.

Depreciation

You can deduct depreciation each year as an expense of the property.  When you sell the property, the total depreciation you've taken over the years is subtracted from the basis of the property.

You can report the sale of the rental property by following these steps in TurboTax ONLINE:

If you haven't already, enter the house and all of your major improvements as individual assets in TurboTax.  Then allocate a portion of the sales price to each of the assets (house, windows, siding, roof).

To do this please follow these steps:

1. Click on Federal  > Wages & Income 
2. In the Rentals, Royalties, and Farm section click on the Start/Revisit box next to Rental Properties and Royalties (Sch E). 
3. On the Income from Rentals or Royalty Property You Own  screen, click Yes.
4. If you have already started adding information about your rental, you will come to the Rental and Royalty Summary screen.  Click on the Edit box next to the property. 
5. On the screen, Review Your [property] Rental Summary click the Start/Update box next to Sale of Property/Depreciation. 
6. If you have already entered assets, you will see the screen, Do you want to go directly to your asset summary? mark the Yes radio button and click Continue.
7. On Your Property Assets, click Edit next to the property.  [If you haven't entered any assets yet, just follow the screens to add the house as an asset.  Once you are finished you will be brought back to the the Asset Summary to enter the improvements as assets.] 
8. When you come to the screen, Tell Us More About This Rental Asset,  mark the box that the item was sold and enter the date of the sale.  
9. You will eventually come to a screen to enter the sales information.
10. Continue through the interview, entering the requested information.
11. You will be brought back to Your Property Assets.  Follow the same procedure with the other assets related to this property.

[suebakert1]

online

[Carl]

Reporting the Sale of Rental Property

If you qualify for the "lived in 2 of last 5 years" capital gains exclusion, then when prompted you WILL indicate that this sale DOES INCLUDE the sale of your main home. For AD MIL personnel who don't qualify because of PCS orders, select this option anyway, because you "MIGHT" qualify for at last a partial exclusion.

Start working through Rental & Royalty Income (SCH E) "AS IF" you did not sell the property. One of the screens near the start will have a selection on it for "I sold or otherwise disposed of this property in  2019". Select it. After you select the "I sold or otherwise disposed of this property in 2019" you continue working it through "as if" you still own it. When you come to the summary screen you will enter all of your rental income and expenses, even it it's zero. Then you MUST work through the "Sale of Assets/Depreciation" section. You must work through each individual asset one at a time to report its disposition (in your case, all your rental assets were sold).

Understand that if more than the property itself is listed in your assets list, then you need to allocate your sales price across all of your assets.  You will only allocate the structure sales price; you will NOT allocate the land sales price, since the land is not a depreciable asset.  Then if you sold this rental at a gain, you must show a gain on all assets, even if that gain is $1. Likewise, if you sold at a loss then you must show a loss on all assets, even if that loss is $1

Basically, when working through an asset you select the option for "I stopped using this asset in 2019" and go from there. Note that you MUST do this for EACH AND EVERY asset listed.

When you finish working through everything listed in the assets section, if you ever at any time you owned this rental you claimed vehicle expenses, then you must also work through the vehicle section and show the disposition of the vehicle. Most likely, your vehicle disposition will be "removed for personal use", as I seriously doubt you sold your vehicle as a part of this rental sale.