Home Business version. sale of rental property, after entering all fields, why total amount of sale shown is way above my sale price?

[999eezz888]

Using Home Biz version. Acquired rental in 2008, sold in Aug 2020.  This is what I did...

--Under Rental Properties & Royalties. Enter all rental income in 2020, fixing up cost, selling expenses, total loss for 2020 is -$32879

--Under SALE OF BUSINESS PROPERTY...

-checked mark on 'Sale of business or rental property that haven't reported

    Description : 12345

    Date Acquired : 08/11/2008

    Date sold : 08/17/2020

    Total Sale : $213250

    Cost :   $113668

    Depreciation taken : $38424

-checked mark 'real estate that I took depreciation on'

-Installment sale : NO

-sale of other business property : NO

-Total gross proceeds 1099-S : $213250

-DONE

However, after entering all the above numbers, the page went back to 'SALE OF BUSINESS PROPERTY' and show the 'total amount of sale' is $269475.

WHY IS THIS AMOUNT is way above my sale price by$54225? I thought TT added the depreciated amount of $38424 but still don't add up. Can someone help to clarify this or is the TT error calculation? 

[Critter-3]

Did you enter the sale in the Rental section and again in the sale of business assets section ???  

Basic formula ...   

Purchase price + cost of purchase + cost of sale + improvements  - depreciation taken = adjusted cost basis

Sales price  -  adjusted cost basis =  profit  

Profit - depreciation taken ( amount taxed as ordinary income at a rate no more than 25%)  =  capital gains

[Mike9241]

what about the land?

[999eezz888]

I reviewed under 'Rental properties & royalties'. Yes it seems that section did ask me the sale info. So what should I do to delete the sale info from that section? Here is the numbers under each section....

rental income : 7200

expenses : 14300

sale of property/depreciation : 2000

vehicle expenses : 0

I thought the 'sale of property/depreciation' is to calculate the depreciation for 2020. I reviewed it page by page and I did answer yes to 'sold'

I am totally confused.  Should I delete the 'sale of property/depreciation' or delete the 'sale of business property' ???

[999eezz888]

I noticed 'the land' value only asked in 'Rental and Royalties' section but not in 'Sale of Business property' section.

Are these 2 sections sync automatically? Are there ways to verify this?

[tagteam · Accepted solution]

---

@999eezz888 wrote:

I noticed 'the land' value only asked in 'Rental and Royalties' section but not in 'Sale of Business property' section.

---

If you had otherwise entered your rental information (income, expenses, etc.) and your asset(s) in TurboTax, you should "sell" the assets in the Rentals and Royalties section, not the Sale of Business property section.

[999eezz888]

Thank you. I will go delete the 'Sale of business property'.

Have questions about the following under 'Rental' section.  I have been using TT when first purchased this rental and now under 'Review Information' the cost and land were the original value. Since then I have been having improvement on it. So should I change to the current cost basis and current land value? Thank you.

[Critter-3]

In your asset  section you should be selling off all of the assets listed there which will include the house, land & All improvements. You need to prorate the cost of sale and the sales price between each and every asset that has been sold. You do not change the basis figures, you continue to use the basis for depreciation. 

[999eezz888]

Have another question here. I have another rental that was sold in Feb 2021, tenant moved out last year so no rental income for 2021, however there are utilities bill and other expenses still needed to pay in 2021. In this case, for next year, do I enter the sale info in ....

A.  'Rental and Royalties' Sale and depreciation section or

B.  'Sale of Business Property' section?

If A then can TT accept 0 as rental income?

if B then how to allocate 'Asset sale price', 'Land sale price' and their portion of sale expenses to calculate the correct depreciation?

Please advise. Thank you.

[Critter-3]

If you could have rented it in 2021 then continue the Sch E entries like normal & report the sale using option A.