how to categorize the sale of a rental that was formerly a primary residence

Forum|Forum|4 years ago
April 17, 2022
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Hi, I bought my primary residence in 2010 for $125,000. It was my primary residence until I converted it to a rental in August 2020, and rented it for ~1 year until I sold it in September 2021 for $254,000. I had $5,000 in HVAC improvements in September 2021 just prior to selling.

How do I categorize the sale of this property in TurboTax? Do I put the sale and the HVAC improvement under the "Rental Properties and Royalties (Sch E)" category as assets or instead, do I put this home sale under the "Sale of Home (gain or loss)" category? (I want to make sure that Turbo Tax is picking up on the fact that I this was my primary residence for more than two years out of the five years prior to its date of sale, which I understand will exclude me from capital gains. I understand I put all of my 2021 rental income under Sch E.)

Thank you! Ivy

ColeenD3

Enter everything in the rental section since you had a tenant in 2021. Just add the HVAC to the basis. You will be asked, even in the rental section, if this was also your primary home.