Question

Sale of Property with Farm (which Horse Breeding Activity) and personal residence on it

Forum|Forum|4 years ago
February 22, 2022
1 reply
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I have a client who purchased a property which included a Farm (for which we have been filing Schedule C activity for Horse Boarding activity since 2009) and a personal residence which the Property owners lived in- the square footage of the property is broken out as 95% farm and 5% residence. The purchase price of the property was $450,000 and the additions to the basis per the closing schedule were $5,454. The cost of depreciable additions for the Horse boarding activity over the years was $80,879 and the accumulated depreciation through 12-31-21 was $48,915. The property was sold in March of 2021 for $500,000. The expenses of sale per the closing statement were $30,310 and the costs to clear the farm area to get it ready for the sale were $10,452. What is the gain/loss on the sale of the Farm/Horse Breeding and how/where do I enter all of the above information in Turbo Tax? I believe that there will be depreciation recapture of $48,915 but I'm not sure where the loss from the sale of the Farm/Horse Boarding portion of the transaction goes.

G

GeorgeM777

You enter your farm income (the IRS does consider horse boarding to be farm income) in the Wages & Income section (TurboTax desktop) or the Income & Expenses section (TurboTax online). Scroll down the page to Business Items and select Farm Income (TurboTax desktop) or select Rentals, Royalties, and Farm and select Farm Income and Farm Rental (TurboTax online).

Whichever above option applies to you, respond to the questions as prompted. If you have used TurboTax in prior years, your depreciation information should already be in TurboTax and will import into your current year return. If you have not used TurboTax previously, obtain a pdf copy of your prior year return so that you can upload such return into TurboTax.

@deuce1313

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