Sale of Rental Property that was originally my Primary Residence

[DianeW777]

Point 1: Do not enter an asset when placed in service and removed from service the same year. Use the cost as part of the sales expenses so that  you incorporate the entire cost basis when entering the sales information.

Point 2: There should be no override in this situation and e-file should be fine.

Point 3: You are correct.  Special depreciation should be included with the sale and it is shown on the appropriate line of Form 4797. The overall gain is still being taxed as it should.

@AB-Tax 

[robertw65]

Yes, closing costs like you listed add to your basis for both original purchase and refinance.

As for the sale aspect of your question, I haven't sold any rental properties, so I don't know the mechanics of how to do it.  I would add additional assets in TT for closing costs and improvements as non-depreciable assets like land.  I would use the actual dates placed in service.  This should not cause any problems like changing the original cost basis.  As a general rule, I wouldn't change the original cost basis on any assets because the cost basis was previously submitted to the IRS on a previous return.

There are a number of ways to account for these additional costs.  I hesitate to just add them to closing costs.  If the costs are substantial, your total closing costs would appear to be too much compared to the sales price.

Again, I haven't sold any rental properties using TT.  If @DianeW777 has experience in this area, I would defer to her judgement. 

[awbaldi]

is it used 100% for business since it was acquired if it was lived in as a primary residence for a portion of time?

[Mike9241]

for the assets like the appliance and HVAC the tax laws say no depreciation if you acquire and dispose of the asset in the same tax year so $0 is correct.

i also would suggest that sales proceeds and no expenses be allocated to these items to equal their cost. it's highly unlikely that these items appreciated in 9 months or so. 

not sure what the other assets are. so you have to consider whether or not they would appreciate. what the IRS wants is allocations based on their relative Fair Value when sold.  

not sure if the cost you give for the house is original or depreciated. 

also the selling expenses seem quite high $58K/$350K that's almost 17%