Question

Rental property sale

Forum|Forum|5 years ago
August 1, 2020
1 reply
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Renovations on rental property started 2019 into 2020. 2019 no rental income. Rental property fully depreciated (bought in 1981). Sold property June 2020. How should I report renovations? And how to report sale of rental property?

Carl11_2

Employee

First, do NOT convert the property to personal use. There's no need for two reasons.

- The property is already fully depreciated.

- The property improvements done after the last renter moved out were never placed "in service". So those property improvements will not be depreciated.

Since your property improvements were not completed before Dec 31 2019 *AND* because they were never placed "in service", you will *NOT* under any circumstances what-so-ever enter "ANYTHING" concerning the property improvements *or* the sale on your 2019 tax return. It will *ALL* be entered on your 2020 tax return which you will not complete until next year. Therefore, there's no need to go into the data entry details until you start your 2020 tax return next year.

T

TL1949Author

Thank you so much for your expeditious answer. You've made the path so directly clear. There is so much conflicting information out there. The IRS is not the same. They do not answer anything beyond simplistic. They've eliminated department and yet our taxes pay for them.

Do you recommend I resume with Deluxe Turbo Tax or shoot for the higher level which is?

Carl11_2

Employee

I take it you're using the CD version of Deluxe that you installed on your computer. I'm fairly confident you can report your sale with that version next year. But there's no way of knowing what Intuit will change in the program next year. Therefore, it's impossible to give you a definitive response until they release the 2020 version - usually around Dec.