Sale of rental property

TurboTax is fully capable of reporting the sale of a rental property.  Here are some tips that may be useful.

The selling price should be prorated for each asset then entered for each asset when you indicate they were sold or disposed of. You will not lose the remaining depreciation because you will use the remaining basis against the selling price to determine gain or loss. 

To figure out the selling price for each asset:

Use the original cost of each asset listed on depreciation, add those together then divide each one by the combined total to find the percentage of the cost for each asset.  Use that percentage times the sales price and sales expenses to find the selling price/sales expenses for each asset. (Choices would also be fair market value on the date of the sale or adjusted basis on the date of the sale, which is cost less depreciation.)

Example:  Original Cost (of each asset on your depreciation schedule)

$10,000 Land                = 13.33% 

$50,000 House              = 66.67%

$15,000 Improvements  = 20%

$75,000 Total                 = 100%

Multiply each percentage times the sales price/sales expenses to arrive at each individual sales price/sales expense.

I hope this example provides clarification to enter your sale. If you have not used TurboTax, enter each asset exactly as it appears on your prior year return.

You need to dispose of the property by telling TurboTax how and when it was disposed of.  Follow the instructions below.

1. Click on Wages & Expenses (left menu); or use the magnifying glass to search and type rentals, then click on the Jump to...
2. Scroll to Rental properties and royalties, click Edit/Add or Start/Revisit
3. Click Edit to the right of each asset to be disposed of/sold
4. Go through screens until you get to Tell Us More About This Rental Asset
5. Click on This item was purchased and sold…….   And continue to answer the questions
6. Review the screen image below.

You might also review information here.