topic Rental Property sale in Investors & landlords

Rental Property sale

Rfred — Mon, 09 Mar 2026 05:23:35 GMT

We sold a rental property that we had in place since 2012 in September 2020. When I enter the sale under the rental property, TT is not taking into account the cost basis/purchase price that I've been using for depreciation.

What am I doing wrong?

In the depreciation tab I have the structure value at 150K and land at 30k - sold it for 365k, allocating 295k to the structure and 70k to the land. Sale expenses were ~31k... TT is saying my income is the full 334k and not accounting for the cost basis minus the ~36k in deprecitation.

Re: Rental Property sale

ColeenD3 — Mon, 21 Feb 2022 17:06:14 GMT

Where are you looking to see this amount? You need to look on Form 4797 to see what is actually your gain. Part I will show you the land and Part III will show you the building.

Form 4797

Re: Rental Property sale

JohnB5677 — Mon, 21 Feb 2022 19:50:34 GMT

I think the culprit here is the depreciation recapture. That would be the $150K for the building over 27.5 years. That would be $5,545 per year, for 8 years would be an add-back of $43,640.

I would expect to see something like:

Gross Sale 365,000

Basis 180,000

Depreciation 43,600

Adjusted Basis 141,400

Total Gain 223,600

This calculation will appear in the 4797 worksheets.

If you pay the TurboTax fee you can see all of the forms.

I can't tell what went wrong without seeing the return.