topic Sale of rental in Investors & landlords

Sale of rental

pongok — Thu, 10 Mar 2022 19:08:28 GMT

I sold my rental property in 2021. On the sales information page, when I entered a higher number of "asset sales expenses", the taxes I owed also went up. This is confusing. Should the opposite be the case? Is there an error in TurboTax?

Please help

Thanks

Re: Sale of rental

ThomasM125 — Thu, 10 Mar 2022 21:48:34 GMT

I don't think there is an error in TurboTax.

Sometimes your tax due can increase when your income decreases, as can be the case if you have an earned income credit (EIC). The EIC increases as your income increases up to a point, so if you add expenses on your return and your income decreases as a consequence, it can make your tax due increase.

You can see if you have an earned income credit by seeing if it is listed on line 27(a) of your form 1040.

You can view your form 1040 while working in the online version of TurboTax by following these steps:

While working on your return in the Federal section of TurboTax:

1. Choose the Tax Tools icon on your left menu bar

2. Tools

3. View Tax Summary

4. Choose the Preview my 1040 on your left menu bar

Re: Sale of rental

pongok — Thu, 10 Mar 2022 23:24:37 GMT

Thanks for your answer.

In my case, the EIC (line 27a on form 1040) is blank; which means I don't' have any EIC. So the question and puzzle still remain. Any other suggestions?

Thanks

Re: Sale of rental

JulieS — Thu, 10 Mar 2022 23:45:11 GMT

TurboTax does background calculations of your taxes constantly through out the tax preparation process. There are not always precisely timed to what you are entering.

You do have a valid concern about whether your return is correct in the end. You should definitely print out your entire tax return before you file it and review the numbers.

If there are numbers that look wrong or need some explanation, please reach out again and we will help you understand, or correct your tax return.