Sale of a second home

[Javadave]

Timeline for the question

*My Husband (and his partner at the time) purchased a condo in 2001 for $103,000

*In 2007 my Husband and his partner broke up and at this point each person is considered a 1/2 owner of the condo

*In 2018 the four of us (my husband and myself along with his ex and his ex's new spouse) decide to rent out the condo for supplemental income

*In 2021 my husbands ex passes away and this leaves the remaining spouse as a 1/2 owner of the condo. The condo is now owed in equal halves by two trusts (R&A family trust and M family trust).

*also in 2021 the M family trust owner decides to sell his 1/2 of the condo to R&A family trust

*on Feb 8, 2022 R&A family trust buy out the 1/2 interest owned by M family trust  for $128,000. From this date forward the condo is owned by only one entity (the R&A family trust).

*on September 1, 2022 the R&A family trust stop renting the condo.

*on April 24, 2023 the R&A family trust sell the condo. After all fees are deducted the R&A family trust have a net profit from this sale for $301,277

I know what the proceeds are but what is considered the "total amount paid"? I need this to determine the cost basis. Your help and insight would be greatly appreciated.

[KrisD15]

To clarify, what were you doing with the basis for depreciation when the rental was changing hands? 

How much depreciation did you take and did the M family recognize a capital gain and/or depreciation recapture in 2021?

[Javadave]

Thank you for the reply and I am sorry it has taken me so long to get back to you. Honestly, I read your reply and thought my head might explode because it sounded like I am in way over my head (tax wise). That being said, I am not really sure what you are asking me or where to find it.

In 2021 I did my own taxes and I am sure I can find whatever entries from that filing that you are talking about. Just tell me how to recognize it. Last year was a complicated year so I had a tax professional do my taxes, and again just tell me what I should be looking for to be able to give you an answer. also, the "M" family did not share any info with me on their filings or capital gains and I am certain they will not share anything with me now.

Should I have my taxes prepared by a professional again?

Thank you- Dave

I use turbo tax because my filings are typically not complicated and TT walks me through everything, but this year with the sale and depreciation and capital gains, I am so confused.

[PatriciaV]

This is a complex situation, and you may consider upgrading to TurboTax Live. This online service provides step-by-step guidance from a tax expert whenever you need assistance, either over the phone or by screensharing. The tax expert would also be able to guide you through last year's tax return to find the information you need to accurately report this sale.

@Javadave 

[Javadave]

I would like to upgrade to TurboTax live but I purchased the desktop version from Costco. What are my options if I need assistance with what now appears to be a slightly complex issue?

[Cynthiad66]

TurboTax Live is available for TurboTax Online customers only. TurboTax Live isn't available in the TurboTax Desktop software.

You can transfer last year's return to TurboTax Online by following these steps.

You can transfer your tax data file (with a filename extension .tax[year], such as .tax2021) only if you're switching a prior year return.

• You can't transfer your current year return.
• You won't be able to transfer a PDF, it must be a tax data file with a filename extension .tax2021.
• Remove any password protection from the data file before transferring. Follow these instructions.

Here's how to transfer:

You have to use TurboTax Online on your computer to do this transfer (it won’t work from a mobile device).

1. Sign in to TurboTax Online and start a new return, or open or continue a return you already started.
2. After the screen has loaded, select the Tax Tools dropdown menu in the left column, and then select Tools.
3. In the pop-up window, select the Transfer last year's TurboTax return from your computer link (if you don’t see this option, you may need to clear and start over).

Follow the instructions to finish transferring your file. Once you're done, follow these instructions to return your Desktop copy of TurboTax.

@Javadave

[Javadave]

What can I do if I have the desktop version? Do I just have to eat the cost of that? Can I return it?

Do I need to purchase the online version and then upgrade to TurboTax Live?

[CatinaT1]

Please call TurboTax Customer service.  Here is a link:  Turbo Tax Customer Service  They can help you switch.