I sold my rental property under a Land Deed Contract in the middle of 2019; how do I file?

[ekoning]

During the middle of this year I sold my rental property under a land deed contract.  I still own the property, but the buyer is paying all taxes, insurance, and utilities; they also put a down payment on the contract for deed.  Do I file only half the year as rental property, and then what do I do the rest of the year?  This is not an Installment Sale, because I am not making any money off the sale.  Do I keep it as a rental property and just input the down payment, taxes, insurance, and utilities.  I am at a loss, any help would be greatly appreciated.

[LeonardS]

This reply by MargaretL  has addressed your question.

"Contract for deed (also called land contract) is entered as Installment Sale in TurboTax. You can choose between reporting all the gain in the first year (so, entire amount in 2019) or you can report it each year in proportion to the payment (so in 2020 and further if applicable). 

Data entry in Turbo Tax:

1. Federal Taxes
2. Wages & Income
3. Scroll down to Less Common Income
4. Select Installment Sales - continue with the interview

Notes:

• Installment sale is a sale of property where you receive at last one payment after the tax year of sale.
• You must report interest each year. If there is no stated interest in the contract, you must calculate and report the unstated/imputed interest.
• For more information on installment sale, click here or visit IRS publication 537 for details
• You may be asked to upgrade to a higher version, such as Premier"

[ekoning]

I tried the Installment Sale, but I will take a LOSS on the Installment Sale therefore I cannot do it.

It says to just report it as a sale then, but I still own the property and will for the next 5 years.

WHAT DO I DO??

[Irene2805]

Report it as a rental property for half the year.  In the interview for the rental property, on the screen Do Any of These Situations Apply to This Property? mark the box I sold or disposed of this property in 2019.  This will ensure that the depreciation calculates correctly.

Report the sale as an installment sale, even if you are not "making any money" off the sale.  You are still receiving a portion of the purchase price each year..  To enter the installment sale, type installment sales in the search box at the top of the screen,  Click on the Jump to installment sales link.