I bought a rental property, and the seller gave me a credit of $10,000. How do I enter that in turbotax? Does that reduce the reduce the Improvement value for the house?

Forum|Forum|3 years ago
March 27, 2023
1 reply
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Thanks

TurboTax Online

MinhT1

The credit given to you by the seller should be used to reduce the cost basis of your rental property.

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marekma11Author

Thanks so much. The house is 70% and the land is 30% of the purchase price. So a settlement credit of $10,000 from the seller, I should reduce the cost basis of the house by $7000.

Thanks again.

Vanessa A

Yes, your depreciable basis in the house would be decreased by $7,000 and your cost basis of the land, even though not depreciable, would be decreased by $3,000 when you go to sell it.

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