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Rental property versus second home in an estate income tax return

I inherited a rental property in 2024. For the start of year 2025, I instructed my property management company to hold the property for sale and not rent it. There were some expenses and costs for repairs that I paid the property management company. I sold the property in October 2025.

Because I did not attempt to rent the property in all of 2025, TurboTax Business is indicating that I should delete the rental property in TurboTax and (I'm assuming) input it as a second home that I sold in 2025.

Is this correct?

 

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2 Replies
ThomasM125
Employee Tax Expert

Rental property versus second home in an estate income tax return

Yes, you should delete the rental property since it was not rented or put on the market as such. It would likely be considered an investment property as opposed to a second home, however, since you didn't have any personal use of it. A such, when you report it's sale, you can choose the Land (other investment purpose) option for the type of property sold. That will allow you to deduct a loss if applicable on the property. 

 

You enter investment sales in the Wages and Income section of TurboTax, then Investment Income, then Stocks, cryptocurrency, Mutual Funds, Bonds, etc... Skip the section where it asks if you want to upload your tax documents. Choose Other as the type of investment sold.

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Rental property versus second home in an estate income tax return

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