no question about sales rental property asked in the Sale of Property/Depreciation section

TurboTax Deluxe does not include a line of questions for the Sale of Property, this is covered in TurboTax Premier or Home and Business.

 

If you are using the Desktop version, you can go to forms mode and fill out the forms for the sale of the property, however, you will not get a guided interview without upgrading to Premier. 

If I upgrade to Premier or purchase Premier version TurboTax, will the data in the current Deluxe automatically moved to the new upgrade or new installed Premier?

Hi,

I just noticed I have TurboTax Premier printed on left upper corner of the software. It's not Deluxe version.  So how may I get the guided questions for 4797 form?

 

Thanks.

To enter the sale of your rental property in TurboTax Premier:

 

1. On the Rental Property Summary page, click Update beside Sale of Property/Depreciation. 
2. Choose to edit the asset you sold. 
3. Continue to the page "Tell Us More About This Rental." 
4. Check the box for "The item was sold, retired, etc." and enter the date it was sold. 
5. Answer the other questions on this page and continue. 
6. You should see questions about the sale as you continue through this section, including boxes for the sales price and expenses.

Q1) Since the sold rental property is co-owned with my parents.  I have two depreciations.  One is the original and the other is the step up.  How to divide the Sales and expenses between these two?

Q2) I have items on Section 179 and special depreciation.  Do I update(edit) for each item like I did for depreciation?

 

Thanks,

If the sold property was co-owned with another taxpayer, you will need to split the sale information between your return and theirs. Allocate based on percentage ownership.

 

If you have more than one rental asset that was sold, allocate your portion of the sales proceeds/expenses based on the adjusted basis of the assets. Include all depreciation taken for the assets (regular, Sec 179, and Special).

 

Here is an example of how to allocate a rental sale (home and land):

 

1. Total Adjusted Basis: $80,000 for home & improvements (net of depreciation); $20,000 for land ($100,000 total)
2. Percentage of Land Basis: $20,000/$100,000 = 20%
3. Total Sales Proceeds (gross sales price) = $150,000
4. Sales Proceeds for Land = 20% x $150,000 = $30,000
5. Sales Proceeds for Home = $150,000 - $30,000 = $120,000
6. Total Selling Expenses = $10,000
7. Selling Expenses for Land = 20% x $10,000 = $2,000
8. Selling Expenses for Home = $10,000 - $2,000 = $8,000

Hi,

Thanks for detailed example explanation.  I have $2003 original depreciation from 3/15/2018 and another $6867 inherited 2/3 depreciation from 3/12/2022 for one same rental property.  Do I split the adjusted basis and land between these two depreciations? Or include $2003 original depreciation into the calculation of Adjusted basis of Asset just like Section 179 and Special and then put $0 for Sales of proceeds of Home/Land and $0 for Selling expenses of Home/Land?

 

Thanks

Hi

Could anyone please help to answer my question.  For my inherited property, the property was stepped up in 2022 hence the depreciation was split into two parts. One(1/3)  is from original cost and the other(2/3) is from the stepped up.  In 5/2023, the property is sold.  How to split the adjusted cost between the two depreciation.

Thanks

Yes.  The answer will assume you have the property or properties assets all listed in your return in the rental section.  Use the instructions below to enter the sales price/sales expenses for each asset in the rental property or properties.  TurboTax will take care of any gain for recapture of depreciation, Section 179, etc.

 

Use the original cost of each asset listed on depreciation, add those together then divide each one by the combined total to find the percentage of the cost for each asset.  Use that percentage times the sales price and sales expenses to find the selling price/sales expenses for each asset. (Choices would also be fair market value on the date of the sale or adjusted basis on the date of the sale, which is cost less depreciation.)

 

Example:  Original Cost (of each asset on your depreciation schedule)

$10,000 Land                = 13.33% 

$50,000 House              = 66.67%

$15,000 Improvements  = 20%

$75,000 Total                 = 100%

 

Multiply each percentage times the sales price/sales expenses to arrive at each individual sales price/sales expense.

 

I hope this example provides clarification to enter your sale. 

 

You need to dispose of the property by telling TurboTax how and when it was disposed of.  Follow the instructions below.

1. Click on Wages & Expenses
2. Scroll to Rental properties and royalties, click Edit/Add or Start/Revisit
3. Do you want to review your rental?, click Yes
4. Under Rent and Royalty Summary, click Edit
5. Click Update to the right of Assets/Depreciation.
6. Do you want to go directly to your asset summary?, click Yes and Continue
7. Click Edit to the right of each asset to be disposed of/sold
8. Go through several screens until you get to Tell Us More About This Rental Asset
9. Click on This item was sold…….   And continue to answer the questions

You might also review information here.

 

@happyDonate