Rental property sale with seller finance loan

[EppingerEstate]

We purchased a home that was our primary residence for about seven years.  We then purchased a newer home, and began renting the other home after extensive renovations.  The accountant placed it into service Oct. '13 with a cost basis of original cost plus renovations.  We recently sold the home to the renter and we hold a personal mortgage that earns interest.  The home was place into service with a value of 203K less the depreciation taken over the past 4 years of 29,013.  We sold the home for 195K, but had also had to add a new AC unit with a value of 6.5K.  How do we equate the seller finance loan installment with these values.  The sale would have been at a small gain.

[MarilynG]

You will be able to enter details on the Installment Sale, and include the 6.5K as a Sales Expense.

In the Rental section, under Property Profile, indicate that you 'sold or disposed of this property' and the date. 

Then in Sale of Property/Depreciation, EDIT your rental home Asset and indicate it was Sold and the Date.  TurboTax will give you a Prior Depreciation amount  (screenshot). 

Say NO to '..included in sale of your main home?'. 

On the Sales Information screen, you can include in Sales Expenses the cost of the new AC unit, plus any other expenses (screenshot). 

YES you '..used this property as Personal Residence after May 6, 1997?'.

The following screen asks 'Do you want to report this sale using the installment method?' If a mortgage was paid off, enter that amount.  If not, Continue.

Enter Principal and Interest received in 2018. TurboTax reports the Gain/Loss on Sec. 1250 property and the Installment Sale Income for 2018 (screenshot). 

You will see the Installment Sale Worksheet in your return.