How to deduct closing cost of rental sale from capital gain

Forum|Forum|1 year ago
January 27, 2025
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We sold a rental property in 2024, total sales price is $1,000,000 (100% rental usage, assuming 50% land), we paid closing expense of $100,000 (commission, county exercise tax, titles, recorder fees, etc). Under TurboTax premier, how should I enter for the "asset sales price" and "land sales price"? For "sale price", TT explicitly says "Do not reduce the amount by any sales expenses.". Should the "asset/land" sales price be 500K each (1m * 100% * 50%), or 450K each (1m - 100k) * 100% * 50%? thanks

MindyB

If you are allocating the land and structure 50/50, the sales price of each is $500,000.

You will be able to enter the sales expenses in the "Sales Information" page within the Schedule E input area for the rental property expenses (assets). This page will be found by navigating to Federal > Wages & Income > Rental Properties and Royalties. Then, navigate to the asset (real estate). ‌You can proceed to deduct the $100,000 in costs by entering the costs on the line "Asset Sales Expenses (Business Portion Only)" and "Land Sales Expenses (Business Portion Only)".