Sale of rental property: Date retired from use vs Date of Sale

[cataxman]

Hello - 

I have a rental property, say I rented this out till March 10, 2021. Then I sold the property in 2021 but because it takes some time to prep the property for sale, say the date of sale (closing date) was May 10, 2021. 

In turbotax when I follow the prompts for sale of rental property, there is only one field for:

Date you sold / retired from use: 

Whereas for me the date I sold (May 10, 2021)  is different from the date I retired from use (March 11, 2021). 

If I put the May 10, 2021 date then the date sold in form 4797 is correct but the rental property depreciation. is calculated till May 10, 2021 which is false, it should be calculated till March 10, 2021. 

If I put the March 11, 2021 date then the date sold in form 4797 is wrong, but the rental property depreciation would be correct for the days in use for rent. 

How can I put the correct dates for until when the property was rented vs the date the property was sold, so that all forms are correct?

[PattiF · Accepted solution]

You should use the date that the property was sold. The way the prompt allows for only one answer means that the "Date you sold/retired from use" is the same date. it was still a rental until the property was sold. 

The correct date is when it was sold and no longer in use (retired) as a rental. You should enter the date that it was sold.

[cataxman]

Thanks for the quick reply! If I use the date sold then the rental property depreciation is calculated until the date of sold. That doesn't seem to be correct? Shouldn't the depreciation be calculated only until the tenant was there and not when it was being prepped to be sold shortly after?

[MaryK4]

You can continue to depreciate until you retire it from service, which is the sale date unless you converted it to personal use in the interim.

Vacant while listed for sale. If you sell property you held for rental purposes, you can deduct the ordinary and necessary expenses for managing, conserving, or maintaining the property until it is sold.

Vacant while listed for sale.

@cataxman

[cataxman]

Thank you for the quick responses! One last question related to this, when calculating the "fair rental days" in this case what would be the calculation? Is it the number of days actually rented or days till rental was sold? Thanks so much!

[PattiF]

You can enter the number of days that it was actually rented, but do not include any personal days.