topic Where to enter sale of rental if was used as main residence prior to use as rental in Business & farm

Where to enter sale of rental if was used as main residence prior to use as rental

mespinool — Mon, 09 Mar 2026 08:31:16 GMT

I've searched this topic, and I see conflicting answers. Some say to input this info under the rental properties and royalties section and others say to input it under sale of business property. Here are the details of my situation:

Purchased as primary residence in 2005 for approx $236,000

Put in use as a rental property in 2007

Sold in 2021 for $338,000

Depreciation during time as rental = $56,071

Commissions/closing costs paid at time of purchase and sale = $27,500

My understanding is that I will be taxed as follows:

Sale price +338,000

Purchase price -236,000

Comm/Closing -27,500

Difference +74,500

I know that I am taxed on depreciation amount also, but not clear on how that is figured in.

I completed the estimated tax worksheet to prepay in September, which calculated that I would owe just over $14,000. Now in TT, it is showing that I owe an additional $11,600. Does this sound correct?

Re: Where to enter sale of rental if was used as main residence prior to use as rental

KrisD15 — Thu, 10 Mar 2022 00:39:04 GMT

Depreciation recapture is taxed at your income tax rate

If you are in a 20% tax bracket, tax on 56,071 would be over 11,000.

Re: Where to enter sale of rental if was used as main residence prior to use as rental

mespinool — Thu, 10 Mar 2022 01:20:03 GMT

Thank you - also, does it make a difference allocating between structure and land? When I enter in the business sale section instead of rental section, it doesn't have fields to differentiate.

Re: Where to enter sale of rental if was used as main residence prior to use as rental

AmyC — Thu, 10 Mar 2022 04:44:35 GMT

Actually, for the Turbo Tax program you will enter it as the sale of main home and it will ask Did you use this home for anything other than primary home? Then you will fill in the information and the program will move it to all the right places. Follow these steps:

Go to the Federal Income section
Scroll down to Less Common Income
Sale of Home start/ edit
Sell home, yes
continue
address
continue
sales information
continue
purchase information
continue
Time in home
Yes
Did you use this home for anything other than primary home?
Yes
# days
Sell another home?
Depreciation? YES
Enter depreciation - regular and AMT
continue
Spouse died?