Turbo Tax does not ask for house sold information

[jzksv]

I have gone through the Turbo Tax Premier and almost finished my tax return. We moved from Florida to North Carolina. We had a rental house and the house we lived in FL. We sold both of the houses, rented for a few months in FL. Moved to NC and renting here. We bought a house in December. Turbo Tax never asked about any of this. Is there a place where I should enter this information? Or is it not necessary. Very confused.

[LeonardS]

Yes, you need to report the sale of your rental property and your home. 

To enter the sale of your rental property.  Follow these steps to enter the sale.

1. With your return open in TurboTax, search for rentals and then select the Jump to link in the search result.
2. Answer Yes to the question Did you have any income from rentals or royalties?
3. When you get to What are you here to report? select Rental property and fill out the description, address, and owner.
4. When you hit Tell us about your situation this year check the Sold box along with any other boxes that may apply.
5. Continue following the onscreen prompts to enter info about your rental property.
6.  When you get to the Review your rental property info screen. You can report the sale in the Expenses/Assets (Depreciation) section, along with any other pertinent info (like income and expenses)
7. You do not enter the capital gains directly, TurboTax will automatically calculate your capital gain or loss on the sale using the information you have provided.

To report the sale of your home in TurboTax follow these steps:

1. Log into your TurboTax account.
2. Select the Wages & Income tab.
3. Scroll down to less common income select Show more.
4. On the line sale of home (gain or loss) select Start/Revisit
5. On the next screen Sale of Your Main Home select yes.
6. Follow the prompts to enter your sale information.

[jzksv]

Thank you so much, this helps, especially with the primary residence sale. But I am still confused as to how to enter the rental house sale. I tried entering it as an asset, and Turbo Tax asks me all the same questions as it did for the rental house, basically, it treats it as a separate asset. Could you please give me more details?

[KrisD15]

UNLESS YOU MADE A 1031 LIKE-KIND EXCHANGE ON THE RENTAL SALE-

For the disposition of the rental, the rental is only entered once, in the Schedule E rental section. 

If this was already forwarded from last year, do not enter it a second time. 

Only enter it if you do not have a rental listed (Schedule E) in your TurboTax Program. 

You then need to report what happened to the rental BEFORE the sale. Enter the rent received and expenses as you normally would in the rental section. 

That will bring you up-to-date on 2021 income, expenses.

Next select Rental Properties and Royalties

Yes, you want to review

Select Edit next to the property listed (there should only be one)

Select Sale of Property/Depreciation

Select Yes to go to summary 

If you only have one asset (the rental itself) select Edit for that asset

     If you have more than one asset, for example you added appliances or a roof, you need to clear each one off the books. In that case it is usually easiest to allocate part of the sale proceeds to the remaining life of the asset. For example, if the roof cost 5,000 and has been depreciated 3,000 down to 2,000, allocate 2,000 to that roof.  

Once the only asset remaining is the property, select Edit

Report that is was sold on the "Tell Us More About This Rental Asset" screen

If you have been using TurboTax in the past, prior years depreciation should populate, if not, you need to enter that amount. 

Depreciation MUST be reported, whether you claimed the depreciation in years past or not. 

You will need to report the date you purchased, the date you sold, the total amount of deprecation claimed, and the selling proceeds. 

(If you needed to allocate some of the selling proceeds to other assets, be sure to allocate only the remaining proceeds to the remaining property) 

TurboTax will make the calculations and report the gain, income or loss appropriately. 

With rental property, there is almost ALWAYS depreciation recapture and this is reported as other ordinary income. 

There is no way around this, depreciation taken (or COULD have been taken if you did not report depreciation properly in the past) is repaid to the point where you "got it back" when you sold the rental. 

Any amount OVER the price you paid would be capital gains. 

For example, you started a rental that cost you 225,000. You allocated 25,000 to the land (land does NOT go through any depreciation) so the remaining 200,000 went to the building. The building is depreciated by 50,000 before you sell. 

You sell for 310,000 where the land is considered worth 35,000.

The transaction will result in 

10,000 capital gains on the land and 100,000 Capital gain on the building. (110,000 Capital gain)

50,000 depreciation Recapture which is Ordinary Income reported on your 1040.

Enter the new rental information.

[jzksv]

I need more help here. After I entered all the information, it tells me we need to pay $21,587 Federal tax and about $1,000 to NC tax. The rental house is in Florida and we owned it for more than two years, so this should be wrong. Maybe I entered the information in the wrong area. Please advise.

[PattiF]

The two-year ownership exclusion rule only applies to your personal home.  There is not an exclusion from gain for a rental property.

As @KrisD15 mentioned above, there is depreciation recapture with the sale of a rental property that is added to your income. Rising property prices in Florida probably contributed to a healthy capital gain on the sale of the rental property. 

[keithckee]

This is not very helpful. Where do you put this information after I put in all the expenses for this rental?

[JulieS]

If you sell a rental home, you enter the information about the sale in the Asset section of the Rental Income & Expenses section. This how to find it:

1. Select Federal from the left side menu.
2. Select Wages & Income.
3. Scroll down the list and find Rental Properties and Royalties (Sch E), click Add/ Edit to the right.
4. You should see the screen, Your 2022 rentals and royalties summary, Click Edit to the right of the property. 
5. When you get to the screen that says, Here's Your rental property info, scroll down to Assets and click Edit to the right of the property.
6. On the screen Your Property Assets, click Edit the right of the property.
7. Continue until you get to Tell Us More About This Rental Asset. 
8. Check the box next to The item was sold...
9. Enter the date of the sale.
10. Continue until you have completed the section. 
     

[wisconsintax]

I've attempted to follow the information in this discussion, but I am still not sure how to enter the profit from the sale of a rental property. Turbo Tax takes me through questions about the property, but never asks how much I sold the property for. I called the Live Help, but they were not able to figure this out either. Please help!

[PatriciaV]

The sale of a rental property is reported in two places under the Rental Properties and Royalties topic.

1. Open your return and go to Schedule E for this rental. (Use the search function in the header to quickly find and jump to Schedule E.)
2. Click Edit/Update beside the Property Profile (or Rental property info).
3. Click Edit under Situations (or continue to the page "Do Any of These Situations Apply?"
4. Check the box for "I sold or disposed of this property..."
5. Continue back to the property summary page.
6. Click Edit/Update beside Sale of Assets/Depreciation.
7. Now when you click Edit/Update beside the rental asset, TurboTax will ask you about the sale.
8. Follow the prompts to report the sale of your rental under this section.
9. Continue to the end to save your work.

@wisconsintax 

[jnsorensen48]

I've read through all these responses and I have the same problem, it asks what I paid for the house and when I sold but never how much I sold it for. Help!

[TomK2023]

If you sold your main home, that income is free and clear as long as:

• You owned the home.
• It was your main home for two years or more within the five years leading up to the sale.
• You waited at least two years between selling your primary home and excluding your first $250,000 or $500,000 from taxes. In other words, you may buy and sell as many primary homes as you'd like, but you'll only get this tax benefit every two years.

To enter Sale of Main Home with/without a Form 1099-S:

1. Click on Federal tab.
2. Then Wages & Income,
3. Then Sale of Home (gain or loss).  Then Edit/Add.
4. Proceed thru interview screens.

Please see images below.

@jnsorensen48 

[chadmar3]

I sold my rental. I have logged it in Turbotax since the beginning. I have recorded all rental income and renovations. However, when I select the option that I sold it in 2023, it depreciated my assets/improvements but not my home. There is no place to actually show where to add the purchase price or sale of the home. I fear that I missed the fact that I should have added the house itself as an asset when we bought it in 2016. Then, we moved into it for a year from 2017 midyear for 12 months. I always chose the option to change it from home to rental, however, I am not seeing where it is an asset to sell.

Help please! Does this mean I have to amend my taxes to depreciate the home from years past? how do I record the sale? 

[JamesG1]

I think that you are saying that you converted a home to 100% rental property in 2017 or 2018.  The rental property was sold in 2023.  Between 2017 and 2023, you have recorded assets and improvements and depreciated those but you did not establish the residential rental as a depreciable asset.

If this is correct, you will still be able to enter the residential rental on your 2023 1040 income tax return.  At the screen Your Property Assets, you may add the residential rental by selecting Add an Asset.

At the screen Did you stop using this asset in 2023, your are able to report the sale of the residential rental.  IRS form 4797 Sales of Business Property Part III will record depreciation allowed or allowable on line 22.

Yes, you may want to amend previous tax returns that are still open and available to amend.

You also may want to investigate IRS form 3115 Application for Change in Accounting Method to 'catch up' the lost depreciation.  Instruction are here.  See also here.

@chadmar3