How to handle short term home rental as part of a home sale

txtxtx — Wed, 01 Apr 2020 21:38:17 GMT

I sold my primary home at a loss after living in it for 10 years. The home was rented to the buyer for 18 days prior to closing, Since the home was "converted" from my primary residence to a rental for 18 days, TurboTax wants to take the loss against the purchase price as a deduction and depreciate the value of the home. Is this correct? It seems like a huge deduction, which would be great if its correct, it just doesn't feel that way. The rental fees for the 18 days were at or above the state fair market value.

Re: How to handle short term home rental as part of a home sale

MarilynG1 — Wed, 01 Apr 2020 22:18:26 GMT

No, it would not be correct.

Since your home was rented to the buyer for only a few days, you don't need to make any entries in the Rental section.

If your home was never a rental prior to the sale, you don't need to report the sale at all, unless you don't qualify for the Home Sale Exclusion or you received a 1099-S.

If you want to report the rental income you received, you could report it as 'Other Income'.

A loss on the sale of your personal residence is not deductible.

Sales Expenses are only claimed for income-producing Business Property, or to offset a Capital Gain if you don't qualify for the Home Sale Exclusion.

Click this link for more info on how to calculate Capital Gain on Home Sale.

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How to handle short term home rental as part of a home sale

Re: How to handle short term home rental as part of a home sale