How should I report business use percentage for a rental property that was vacant for 5 months and then sold?

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April 7, 2025
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For a rental property, under depreciation, TurboTax is asking, "Have you used this item 100% for this business since you acquired it?" The rental property was rented from the start of the year until June 2 (and was rented multiple years prior), then was vacant and not available for rent as I prepared it for sale. Then it sold on November 9.

(As extra info, from 6/3 to 11/9, I did not stay in it, or store anything in it (even all furniture was removed), nor did anyone else. In layman's terms I did not get any personal use out of it. It was simply vacant as I repaired, repainted, and cleaned it to prepare it for sale.)

What should I report as the "percentage of time I used this item for this business during the tax year"? Specifically,

1. Is it calculated so that 1/1-11/9 is considered 100%, or so that 1/1-12/31 is considered 100%?
2. Is the period from 6/3-11/9 considered "not business use" in this case?

TurboTax Home & Biz Windows

Best answer by DianeW777

Yes. It will be calculated and is considered 100% until the sale date.

Answer 'Yes' to the question it was rented all year at 100% of rental value. When you indicate it was 'This item was sold, retired, stolen, destroyed, disposed of, converted to personal use .... etc. >

Enter the date it was sold - Question 2: temporarily making improvements does not specifically indicate it is no longer going to be available for rent.
Continue to the screen 'Confirm Your Prior Depreciation' and then you will see the current year amount. This will stop the depreciation in November.
Enter all of the sale data and TurboTax will carry the appropriate gain to the forms required.

Note: Be sure to separate land from the building. You can use the example below to arrive at the selling price/selling expenses for each asset in your rental activity.

Example of arriving at the selling price and sales expenses for each asset in your rental activity (you can add all assets together for the sale entry below except for the land which will be a separate sale.

Example: Original Cost (of each asset on your depreciation schedule)

$10,000 Land = 13.33%

$50,000 House = 66.67%

$15,000 Improvements = 20%

$75,000 Total = 100%

Multiply each percentage times the sales price/sales expenses to arrive at each individual sales price/sales expense.

DianeW777Answer