Sale of Rental (business) Property - What lines from the HUD1 to use?

[skgmail09]

I sold a property which was purchased in 2006, used exclusively for personal use until August 2011 when it was converted to be exclusively used as a rental (business) property.  It was sold in June 2018.

What lines from the HUD1 should be used to determine the sales price (line 401, 420, or something else)?

What lines from the HUD1 should be used to determine the sales expense (is it everything from page 2 of the HUD or only portions of it, if so which lines specifically)?

[Cindy0H · Accepted solution]

You will start with line 420 on the HUD statement as the sales price.

If you were the seller, your sales expenses would be found in the "Paid From Seller's Funds at Settlement" column, Page 2, line 1400 of the HUD-1 statement.

If you have other questions about this, ask in the comment section below.

[MW8]

I just started a real estate brokerage where I made one sale in 2021, which is captured on the standard HUD form. Where do I enter that revenue in turbo tax?

[MarilynG]

As a business, you could set up the home you sold as a Business Asset, with an original Cost Basis of what you paid for it.  Then report the 'sale of the asset' where your Sales Expenses are added to the Cost Basis and substracted from Sales Price to determine the Gain/Loss on the sale.

Your HUD settlement costs would be considered Sales Expenses. 

Any property improvements you made after purchase could also be added to the Cost Basis when reporting the sale.

Here's more info on Home Sale for Real Estate Professionals.