Where do I record the sale of my investment property?

[DS30 · Accepted solution]

It depends but you will need to report the sale of this investment property as the sale of a capital asset. 

To enter this as a capital asset sale in TurboTax, log into your tax return  (for TurboTax Online sign-in, click Here) and type "investment income (gains and losses)" in the search bar then select "jump to investment income (gains and losses)". TurboTax will guide you in entering this information (see step 6 below) 

Alternatively, To enter this transaction in TurboTax Online or Desktop, please follow these steps:

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
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 “Investment Income”
5. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section)
6. The first screen will ask if you sold any investments during the current tax year (This includes any asset held as an investment property so answer “yes” to this question)
7. Since you did not receive a 1099-B, answer “no” to the 1099-B question
8. Choose type of investment you sold - select everything else
9. Some basic information:
1. Description –  Usually the address of the property sold
2. Sales Proceeds – Your net proceeds from the sale (usually reported on 1099-S)
3. Date Sold – Date you sold the property (on 1099-S)
10. Tell us how you acquired the property - purchased
11. Enter the your cost basis- cost plus capital improvements less any depreciation deducted or allowable as a deduction less any casualty losses take on the property.
12. Date acquired  (Just remember that the date acquired should be more than a year before the date sold in order for the sale to get long term capital gains treatment and the lower capital gains rate)
13. If you had a loss, on the question of "Did you use this property for business or investment?" If the property was not used for any personal use, you will answer that this was for investment. Otherwise, you will not be able to deduct the capital loss of a personal use capital asset.

Click these links for further information about reporting the sale of a capital asset or Capital Gains and Losses

If you are not able to report this sale under the investment section, you will be able to report it as the sale of a business asset.

To enter this investment property as 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 Investment Property Sale here
1. Description - address of property
2. Date acquired - original acquisition date
3. Date sold - date of sale (should be on 1099-S)
4. Total sales price - total sales price (should be listed on 1099-S)
5. Cost of property (or tax basis) plus expenses of sales - original cost plus any capital improvements plus expenses of sales
6. 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)
9. What type of property is this? - select appropriate answer related to your investment property here.
10. Installment sales - no if not on installment sale
11. 2 screens that show the summary of what you have entered for your property sale
12. 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.
13. Total Gross Proceeds - enter your 1099-S sales information here (this could be the same amount that was reported earlier as sales price)

[nomisela1]

TurboTax Business CD- could not find the type as said on 8.Choose type of investment you sold - select everything else
any ideas?

[AKJeff]

I had the same problem and called in a support ticket.  Also submitted a bug report.  The support reply I received was to go to forms and basically fill out Schedule D where all the 1099-S information flows into.

I hope Intuit/TurboTax fixes this bug, it's a nuisance and more importantly there's other info I need to enter into Schedule D using the walk-me-thru guide so hopefully I won't encounter errors with that over-writing what I apparently need to enter manually (the 1099-S info).  

The bug seems to be when the program asks "do you have a 1099-B" and you answer "no", it doesn't take you to the "type of investment sold" question, it basically asks you to fill out 1099-B information which is erroneous.

[boomersf15e]

When I type "No" to receiving a 1099-B, the screen takes me to "Tell us about sale #1"  I do not have the option to enter "Other" or describe the sale.  I am using Turbotax Premier, so I don't know why.  Can you tell me what I should do?

[ask2648]

Do you know if TurboTax has been updated with the fix? in the reply you got from Turbo Tax did they provide the steps to manually input data on schedule D? Please share if you have any information on it. I am in a similar situation. 

Thanks,

[Cass0317]

We'll automatically generate and fill out Schedule D when you report 1099-Bs and other capital asset sales:

1. Open (continue) your return if it's not already open.
2. Search for Schedule D and select the Jump to link at the top of the search results.
3. Answer Yes to Did you sell any stocks, mutual funds, bonds, or other investments in 2020?
4. Follow the instructions to enter your capital asset sale(s). We'll also fill out form 8949 if you sold stock.

Please see the links below for more information:

• Where do I enter a 1099-B?
• Where is Schedule D?

If you need further assistance, please reach out to us.

[AKJeff]

I updated TurboTax Premier today and started a blank return to see if Intuit has fixed the issue.  THEY HAVE NOT.  I am disappointed because the program clearly does not behave as the Help/Instructions indicate, and more so since I've called, emailed, and reported this bug directly via the program bug reporting tool.  Cass0317's reply does not address the issue, which is WITH REPORTING 1099-S (REAL ESTATE TRANSACTIONS) AND OTHER NON-1099-B TRANSACTIONS, not with 1099-B's.

I deleted the email reply I received from Turbo Tax - it basically said to navigate to Forms View, Schedule D, and enter the info directly,  included the original post from DS30, but lacked sufficient detail to be much help.  So, I ended up getting the program to correctly calculate the gain/loss on a real estate transaction (reported on 1099-S) by doing the following:

1) Go to: Federal Taxes/Wages&Income

2) Start (or update) the first item which should be "Stocks, Mutual Funds, Bonds, Other"

3) Choose "yes" when asked if you sold any investments in 2020

4) Choose "no" when asked "Did you get a 1099-B or a brokerage statement for these sales"

5) Choose "I'll enter one sale at a time" on the next screen

6) Enter description, date sold, date acquired, sale proceeds, and cost/other basis.  Select the holding period (short or lonog term).  Note that date sold and sale proceeds will be shown on your 1099-S.  You'll have to rely on your other personal records to get the date acquired and cost/basis.

7) The next couple screens will ask about less-common items for the sale (market discounts, etc.), whether the sale was employee stock,  and finally adjustments that may apply.  For me, I had some fees/selling expenses to deduct and this is where I entered them.

Fortunately the calculation in my case was pretty straightforward so I could check the math quite easily.  Basically take the sales price, subtract the cost/basis, subtract any fees/expenses, and that is the capital gain/loss.  I didn't have any depreciation etc.  

Oddly, the first time I tried the above steps there were references to 1099-B box numbers which didn't make sense.  After I had manually navigating to Forms View/Schedule D, then gave up, when I went back to the steps above in the step-by-step view, I got the data entry boxes as I described in Step 6 above without erroneous references to 1099-B boxes.  If you try to follow my steps above, and get something odd, try going to Forms View, Schedule D, then closing and going back to Step-by-Step view and trying my approach again.

Again, very irritating that we have to find workarounds for a minor program bug that should be easily fixed.  When I spoke with a TurboTax specialist, she wasn't sure how to report program issues or who in her company to report them to - she was a tax specialist, not a program expert, and didn't know how to contact the program experts.  

[Vysyaraju]

Same issue. I have the 2020 Premier version. They type selection does not appear at all. Which is very annoying. Don't understand how they wrote step by step instructions without actually confirming the steps by using the software. 

[twiedmayer61]

Same problem with my partnership return.  Sold house that had apartment as rental unit.  Cant enter it as single real estate transaction as it calculates the capital gain wrong and I cant correct it manually on form.  When I try to do it as two separate transactions as a capital asset sale it just does not feel like an accurate representation of the sale.  If I have to I will handle it this way and let the cards fall where they may, I'm still reporting the capital gain which all partners will be taxed on as reported on the K1 accurately so who knows.  Agree this should not be an issue with the software as this is not a unique situation.