Rental Property sale

[johnbrigid]

I need some assistance with the group on a few questions I have in regard to a sale of a rental property I just sold.

I summary I have just sold my investment property I have had since 2007. The property was rented from Jan 2021 to April 30th of 2021 for this calendar year. I spent from 4/30/2021 until the property sold on 11/28/2021 fixing it up. My questions are these as I am confused and not a tax expert by far; 1) The commission I paid the realtor at the sale was $7,140. Is this listed in Schedule E under commissions paid or am I to list this elsewhere in Turbo Tax? 2) I purchased new windows for the property in May 2021, where to I list this as an expense? In Schedule E or elsewhere in Turbo Tax? Of course I want to ensure I am claiming all of my expenses by also listing them accordingly and correctly? I appreciate all of the help from this group..... I will probably have other questions..  Thank you so much..... 🙂 John L

[ColeenD3]

This was only rented for a partial year in 2021?

The improvements will be added to the basis to reduce the sale price. The same is true for any closing costs such as realtor commissions. These are not rental expenses.

[johnbrigid]

Thank you Colleen: Yes, the property was only rented from 1/1/2021 through 4/30/2021. It was then cleaned up, fixed up and sold on 11/298/2021. If my sales price was $119,000, do I just subtract the realtor commission, and the windows out of that and use that as the final sales price? Or is there a certain section in Turbo Tax that I need to input those two expenses. Sorry, I'm still learning and appreciate the help. 🙂  Thanks! John

[PattiF]

The realtor commission is added to the basis as well as the windows that were purchased as ColeenD3 noted.

When you report the sale of a property, you need to know the dates purchased and sold along with the proceeds from the sale and the cost basis.

The basis is the price that you originally paid plus any improvements that were made while you owned the property along with certain costs found on the Settlement Statement from the sale.

Items added to basis.

You can include in your basis the settlement fees and closing costs you paid for buying your home. A fee is for buying the home if you would have had to pay it even if you paid cash for the home.

The following are some of the settlement fees and closing costs that you can include in the original basis of your home.

Abstract fees (abstract of title fees).

Charges for installing utility services.

Legal fees (including fees for the title search and preparation of the sales contract and deed).

Recording fees.

Surveys.

Transfer or stamp taxes.

Owner's title insurance.

Any amount the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, the cost for improvements or repairs, and sales commissions

In general, adjusted basis is your original costs plus improvements. The basis is what was paid originally plus any capital improvements. This includes a new roof, heating or air conditioning unit, a fence, a room, or any major improvements that also add to the basis.