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Level 2
posted Mar 2, 2025 2:34:40 PM

How do I report the sale of my personal residence that I partially rent out.

I sold my personal residence last year. I rent out 2 parts of my home, a residential cottage and farm raw land on my personal residence and report them through 2 separate schedule E's.  There are depreciable assets for each of the rentals which are specific to those rentals.

How do I report the sale of the house and the 2 rental properties associated with the personal residence?

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1 Replies
Expert Alumni
Mar 2, 2025 2:57:20 PM

You will report each sale separately.   You will have two sales for the two rental properties and another for the sale of the personal residence.   You are going to indicate each asset has been sold in the Rental Properties section of TurboTax.   Follow the instructions here to report the sale of your rentals - I sold my Rental Property - how do I enter it in TurboTax?  

 

For the sale of the personal residence - see the instructions in this TurboTax FAQ

 

If you sold your home, you can deduct:

 

  • Home improvement costs (permanent changes) as an adjustment to the basis of the home you sold (not the same as repairs and maintenance)
  • Mortgage interest and real estate/property taxes charged at closing
  • Selling expenses to reduce your gain on the sale side of the home

Since you sold a home that you use as a rental or investment property at a loss, you might also be able to deduct it as a loss.

 

If you sell a passive activity property at a gain, you may use any suspended passive losses from that property to offset the taxable gain. This potentially reduces your overall tax liability associated with the sale and softens the financial impact of capital gains.

 

TurboTax will prepare all of the necessary forms, including any depreciation recapture.