Sold rental house

[Randy2024]

Sold a rental house in 2023, and completed tax return on Turbo tax, yet no where did it ask me information about the sale.  I did select the box when it asked if I sold the house, at that point it said it would ask more questions in the investment area.  I was never asked any more questions.  Where do i go to add the sale price, cost basis and to recapture the depreciation?

[PaulaM]

Go back to the rental section and after you indicate that you sold the property in the Property Detail section, continue and answer questions until you reach the Rental Summary page. You should see Sale of Property/Depreciation section. This is where you would recapture depreciation and enter the details of the sale.

[Randy2024]

I found where edit each asset and put date of the sale of each asset that were placed in service earlier but no where do i see where to put the sale price.  Please guide me.

[Carl]

Reporting the Sale of Rental Property

If you qualify for the "lived in 2 of last 5 years" capital gains exclusion, then when prompted you WILL indicate that this sale DOES INCLUDE the sale of your main home. For AD MIL personnel who don't qualify because of PCS orders, select this option anyway, because you "MIGHT" qualify for at last a partial exclusion.

Start working through Rental & Royalty Income (SCH E) "AS IF" you did not sell the property. One of the screens near the start will have a selection on it for "I sold or otherwise disposed of this property in  2023". Select it. After you select the "I sold or otherwise disposed of this property in 2023" you continue working it through "as if" you still own it. When you come to the summary screen you will enter all of your rental income and expenses, even if it's zero. Then you MUST work through the "Sale of Property/Depreciation" section. You must work through each individual asset one at a time to report its disposition (in your case, all your rental assets were sold).

Understand that if more than the property itself is listed in your assets list, then you need to allocate your sales price across all of your assets.  You will only allocate the structure sales price; you will NOT allocate the land sales price, since the land is not a depreciable asset.  Then if you sold this rental at a gain, you must show a gain on all assets, even if that gain is $1 on some assets. Likewise, if you sold at a loss then you must show a loss on all assets, even if that loss is $1 on some assets.

Basically, when working through an asset you select the option for "I stopped using this asset in 2023" and go from there. Note that you MUST do this for EACH AND EVERY asset listed.

When you finish working through everything listed in the assets section, if you ever at any time you owned this rental you claimed vehicle expenses, then you must also work through the vehicle section and show the disposition of the vehicle. Most likely, your vehicle disposition will be "removed for personal use", as I seriously doubt you sold your vehicle as a part of this rental sale.

[Randy2024]

I did go thru each asset and answered the only question it asked, which was "date of sale".  No were did it ask for sale price on any of the assets.  This is a commercial building that was rented out, is this treated differently?  I saw this comment "If you disposed of this property by any of the above means, enter your sales information later in the interview under "Business Income/Sale of Business Property."  How do i get to this location?

[Carl]

If you are not asked for sales information on an asset, the most common reason is because you *incorrectly* selected YES on the "Special Handling Required?" screen. You must select NO. Otherwise, you will not be asked for sales information.

[Randy2024]

You are correct, I did answer yes on the special handling required.  The last line under the listed Turbo Tax considerations asks if this "asset was a rental", should i say no even though I rented out a commercial building?

[ThomasM125]

The question regarding the asset being a rental, home office or improvement within a home is asking if your are renting out a portion of your home, or if you have a home office in your home, or if you have a home office improvement within your home. Since you are selling a commercial building that is not associated with your home, you would answer no.