Rental property or second home?

[easyduzit88]

I sold a house that was previously a rental, but sat vacant for 2019 until the sale in June. Should it be listed as a rental property  or a second home? Turbotax appears to be a little contradictory about this.

[VictorW9]

No, if you have never lived in the property or made it a vacation home it is still considered investment property. The fact the property was not rented in 2019 does not qualify it as a second home.

[easyduzit88]

Thank you for the response, I certainly appreciate the promptness!

I have 2 minor questions hopefully to clarify this issue once and for all.

I did live in the house at one time, but that was over 10 years ago. I suppose that makes no difference, correct?

Also, when I try to enter  the property sale in Turbotax Premier, it asks me how many days I rented it, and how many days I used it personally.Once I. enter "0" for both, it tells me to remove it from the rentals listing, followed by "Since this property was not a rental at all in 2019, you should delete it as a rental".

I'm a bit confused by that. Any clarification on this would really help!

Thanks again!

[ColeenD3]

Since you did not rent the house in 2019, you will need to enter it in another part of the program. This property will not qualify for any exclusion.

To this rental sale under the sale of a business property in TurboTax Online or Desktop, please follow these steps:

1. Once you are in your tax return, click on the “Business" tab ("Federal Taxes" tab in Premier)
2. Next click on “Business Income and Expense" ("Wages and Income" tab in Premier)
3. Next click on “I’ll choose what I work on” (Jump to full list)
4. Scroll down the screen until to come to the section “Less Common Business Situations” ("Business Items" in Premier)
5. Choose “Sale of Business Property” and select “start’
6. Select "Sale of business or rental property that you haven't already reported"
7. Sale of Business or Rental Property - yes
8. Enter all the information about your Rental Property Sale here
9. Description - address of property
10. Date acquired - original acquisition date
11. Date sold - date of sale (should be on 1099-S)
12. Total sales price - total sales price (should be listed on 1099-S)
13. Cost of property (or tax basis) plus expenses of sales - original cost plus any capital improvements plus expenses of sales
14. Depreciation taken on this property - total depreciation taken property when rental (Please note the IRS will assume that you have taken the correct depreciation on your rental property while your property was available for rent regardless of whether you have actually take it or not)
15. What type of property is this? - select - Rental estate that I took depreciation on.
16. Installment sales - no if not on installment sale
17. 2 screens that show the summary of what you have entered for your property sale
18. Sale of Other Business Property - Choose yes if any of these situation apply, otherwise choose no.

1. You sold property that cannot be depreciated such as vacant land, mineral rights or inventory
2. You sold business or rental property that you owed for one year or less
3. You sold business or rental property at a loss.

1. Total Gross Proceeds - enter your 1099-S sales information here (this could be the same amount that was reported earlier as sales price)