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Level 3

Sale of Personal Home Converted to Rental

I need assistance entering data for the sale of personal residence.  We qualify for the 2 out of 5 year rule.  Before the sale, we had converted the home to a rental.  The house was sold for a gain.  We qualified for the MJF exclusion but we were subject to the recapture gain only based on the depreciation taken.   In my Schedule E depreciation schedule, it shows three assets (house, fence, and improvements) being depreciated, and land not depreciated.


I believe the data should be entered into Sch D, Form 4797, and Form 8949 but my amounts aren’t flowing correctly to the forms.  I think the forms should be presented the following way:


*Form 8949, in Part II, should show the details of the sale as long-term with a code H but no gain showing.  I don't know how to get the code H to show.

*Form 4797 should show only the recapture gain on Part III. 

*Schedule D should show on line 10 amounts flowing from Form 8949, and line 11 shows the recapture gain.


Thank you for your suggestions.