Question

My business is real estate development, Turbo Tax is trying to make it rental real estate

Forum|Forum|4 years ago
February 21, 2022
3 replies
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My business is real estate development, Turbo Tax is making it rental real estate. Under Business Info the type is real estate dev and I have not checked rental.

I sold a property this year that I need to dispose of in Turbo Tax but it was not a rental property. How do I get it to stop insisting my business is rental?

TurboTax Business Windows

ColeenD3

Where are you entering the sale? Did you enter the asset and report the sale on Schedule C? Did you enter the sale in Sale of Business Property?

A

AW175Author

@ColeenD3 This is company is a LLC. I have not entered it because there does not seem to be a screen that applies since Turbotax is convinced my Real Estate Development/ Holding company is a rental company.

Carl11_2

Employee

Turbo Tax is making it rental real estate.

You really need to provide more details on what your business does, and where you're entering things in the program. Also, did you receive any tax forms related to the business? For example, if you received a 1099-MISC with income reported in box 1, then that's passive rental income and the program is treating it correctly.

If it's treating it like rental real estate, then did you start in the Rental & Royalty Income section? Or did the program "take you there" most likely after entering 1099-MISC box 1 income?

Where are you attempting to report the sale of the real estate you sold? Was it raw land? Or land with a structure on it?

A

Anonymous_

Employee

Enter the transaction in the Dispose of Business Property section (unless the property was being held strictly as an investment).

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A

Anonymous_

Employee

Also, go back to the Business Info tab and click the Edit button next to Type of business.

Ensure that the "We rent real estate to others" box is not checked.

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ColeenD3

There have been a number of suggestions in the thread. I think we need more information, such as what function does you RE Investment company do and what is the relationship between your company and the building sold.

The building is either a rental (you said no), a business asset, or a personal property that is an investment that you sold. Is your business such that you acquire buildings as investment properties?

If your LLC does not have rental properties, then what exactly does it do?

A

AW175Author

@ColeenD3It buys raw land as an investment, holds them until they appreciate in value and then sells them. There was not a building on the land that was sold.

A

Anonymous_

Employee

There are parameters as to whether the company would be considered a "dealer in real estate" or a "real estate investor".

You can do an internet search using those terms and you will get a huge number of hits.

A few include the length of time the real estate is held, the number of transactions in any given period (or tax year), how the real estate is used (of if it is not used at all), the original intent when purchased, whether improvements are made, the amount of effort involved in selling the properties, etc.