topic Sale of second eome that was leased for 7 years of the 21 years of owership in Get your taxes done using TurboTax

Sale of second eome that was leased for 7 years of the 21 years of owership

Fritzcol — Wed, 05 Mar 2025 15:52:18 GMT

We used the unit 5-9 weeks a year for 14 of the 21 years and leased it for 7 years. How do I report the sale in TurboTax?

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

KrisD15 — Wed, 05 Mar 2025 16:20:43 GMT

In order to answer, we would need clarification regarding how you reported the 7 years it was rented.

Was it rented the last 7 years? Did you file Schedule E for those 7 years and sell it after?

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

Fritzcol — Fri, 07 Mar 2025 16:29:23 GMT

It was more complex than what you suggested. We found we did not use it for a few years more than 3-4 weeks. At that time we started leasing it for 7 straght years. At that point I had retired and we were free to use it from 6-9 weeks a year so we converted it back to personal use for 10 years and then sold it. I guess ithe sale would go in the business section because we did file schedule E for 7 years. However, could there be some calculation to prorate it because we only rented it 7 of 21 years of ownership?

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

Fritzcol — Sat, 08 Mar 2025 02:40:25 GMT

Yes

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

Fritzcol — Sat, 08 Mar 2025 04:58:28 GMT

Yes, we did file E doring those years but not after we stopped renting it.

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

Fritzcol — Sat, 08 Mar 2025 05:07:32 GMT

Why do you not reply>

? I said yes to Form E.

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

Fritzcol — Sat, 08 Mar 2025 05:12:57 GMT

We rented it form E. We did not rent it out for 10 years after those 7 years. We used for personal use in those years.

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

Fritzcol — Sat, 08 Mar 2025 13:52:13 GMT

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

Fritzcol — Sat, 08 Mar 2025 14:03:25 GMT

KrisD15 never responded to the question that was asked and then answered. Why not?

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

Fritzcol — Mon, 10 Mar 2025 21:00:07 GMT

We used it for 4 years for personal use. We then rented it out for 7 years. we then converted it back to personal use for 10 years. Yes, we used Schedule E for earnings/expenses and depreciation for those 7 years of rental use. Do we record the sale totally in the business section or the personal income section or possibly part in both sections?

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

DianeW777 — Mon, 10 Mar 2025 21:27:38 GMT

Yes, you should report this as a sale of business property. This way the depreciation is recaptured and the remainder of the gain would be treated the same way as a second home sale with capital gain treatment. The answer assumes you did have a main home you used and still live in.

Open your TurboTax return and follow the steps below (TurboTax Online/Mobile or TurboTax Desktop:(
Under Income scroll down to Other Business Situations
Select Sale of Business Property
Select Sales of business or rental property that you haven't already reported.
Answer 'Yes' to Do all of the following apply...?
Enter your sales information, do not make an entry for depreciation (no zeros)
1. Description of the Property (Second Home/Previous Rental Home)
2. Sales Price/Sales Expenses
3. Date acquired and date sold
4. Cost
5. Depreciation

@Fritzcol

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

Fritzcol — Tue, 11 Mar 2025 19:57:09 GMT

Thank you for the detailed information of where and how to enter it in TT. I have one clarification regarding

the sale of the property: What should be included in the "sales expenses"portion?

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

KrisD15 — Tue, 11 Mar 2025 20:10:56 GMT

Here is a list of items you may include as "Sales Expenses"

advertising
appraisal fees
attorney fees
closing fees
document preparation fees
escrow fees
mortgage satisfaction fees
notary fees
points paid by seller to obtain financing for buyer
real estate broker's commission
recording fees (if paid by the seller)
costs of removing title clouds
settlement fees
title search fees, and
transfer or stamp taxes charged by city, county, or state governments

HERE is a link to that original answer

HERE is an IRS link with information on selling a rental

In order to notify a specific agent, please use the @ sign in front of their name

@Fritzcol

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

Fritzcol — Tue, 11 Mar 2025 22:02:17 GMT

Thank you once again for the clear answers!

I have one more question regardiding the sales information. should I enter a pro-rated cost of property (+ expenses) for the cost section or the full costs and sales expenses?

Thank you.

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

Fritzcol — Wed, 12 Mar 2025 02:14:56 GMT

In the section for reporting the the cost with expenses. It made no difference if I entered the entire amount or pro-rated amount. The program kicked it out and said I made no profit from the business. In the initial list of

process of entry in this section, you had recommended no entry in the depreciation section but the last entry on the list did say depreciation. The results I got were if no depreciation was entered (as suggested) before the list of entries. Is this correct?

Re: Sale of second eome that was leased for 7 years of the 21 years of owership

DianeW777 — Wed, 12 Mar 2025 13:52:20 GMT

Depreciation is a required entry, it's unclear where the confusion might be. If you follow the entry steps provided above, the depreciation used during the leased years must be entered when entering the sale information. There will be a portion of taxable gain because you did expense as depreciation and this reduced your income in those year.

@Fritzcol