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Level 2

How to report rental property sale by TurboTax - Is there a step-by-step instruction ?

I owned a rental property for 10+ years and it had been rental property throughout the years.

I started the selling process from the end of 2018 and it got sold in Spring 2019. There was no rent collected since 1/1/2019 since it's in the sale process. 

 

During the reporting process, I did not see any field to utilizing the info from my "purchase closing data", "CA tax withdrawn tax data" or "Fed 1099-S".   It only asked me the sale price and expense at the depreciation section.  I may go through a wrong procedure.
 
Is there any step by step instruction based on TurboTax, better showing the screenshots what I should select and input, so that I can get through the right route?
 
Thanks!
 
 
 
 
3 Replies
Employee Tax Expert

How to report rental property sale by TurboTax - Is there a step-by-step instruction ?

I assume you are entering the information in Sales of Business Property, since there was no rental use in 2019.

 

  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

 

  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)
  1. What type of property is this? - select - Rental estate that I took depreciation on.
  2. Installment sales - no if not on installment sale
  3. 2 screens that show the summary of what you have entered for your property sale
  4. Sale of Other Business Property - Choose yes if any of these situation apply, otherwise choose no.

For the CA withholding, enter it following these steps.

 

 

Federal Taxes tab

  • Deductions and Credits
  • I'll choose what I work on
  • Estimates and Other Taxes Paid
  • Other Income Taxes - click start or update
  • Other Income Taxes Paid in 2019
  • Withholding not already entered on a W-2 or 1099

 

 

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Level 2

How to report rental property sale by TurboTax - Is there a step-by-step instruction ?

Thanks for the very helpful response.  I actually entered the info at "Rental property -> Depreciation" area and so encountered the issues, but Not "Sales of Business Property" area.

 

The reason was that when I went through "Sales of Business Property" before, TurboTax instruction told me not to report the rental property sale there, but report it at the "Depreciation section of the rental property".

 

Per your response, I have some further questions...

 

1. As TurboTax instructed me to use "Depreciation" section at the rental property to report the sale, and so I just went to my rental property list, input "0" days for rent and personal use in 2019, and go through the steps to reach "depreciation" area.  Then I only saw "sale price" and "expense" field that allows me to input amounts.

 

Per your instruction, “Business Income and Expense" is a totally different section - Reporting at this  section seems not consistent with TurboTax instruction regarding rental property sale to make the reporting at Rental property->Depreciation.

 

2. What're the differences between "depreciation" in rental and “Business Income and Expense" to report rental property sale?

 

3. In the actual detailed situation - the tenant lived there in 2019 but since it's for sale and I need the assistance from the tenant, there was no rental collected.  Should this considered being rented or not during 2019, per tax definition?

 

4. If I input ">0" days (like 60 days) for renting during 2019 in "Rental property -> Depreciation" procedure, will the process allow me to report the sale at "Depreciation" area instead of “Business Income and Expense" area? 

 

5. If  Item 4 is "Yes", will the Sale reporting at Depreciation give me the chance/form/page to input "state withdrawn tax", "adjusted basis", "purchase cost" and 1099-S as “Business Income and Expense" does?

 

Thanks!

Level 2

How to report rental property sale by TurboTax - Is there a step-by-step instruction ?

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