Question

Sale of Rental Property

Forum|Forum|6 years ago
February 26, 2020
2 replies
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I sold rental property in February 2019 and did not rent at all in 2019. I had a carryover loss that did not carryover to 8582 because I did not receive any 2019 rental income. Yet, I had a loss from the sale of the rental property in addition to the carryover loss. TurboTax dropeed the entire rental records, any thoughts on how to handle the two losses?

Critter

Employee

@Carl11_2

this poster needs your special kind of help

Carl11_2

Employee

At this point, you have no choice but to clear your return and start all over from scratch. If using the CD/Desktop version of the program, simply close the program, delete the .tax2019 file in the documents/turbotax directory and then start the program. It will be "as if" you just installed the program and started it up for the very first time.

If using the online version of the program, then somewhere in TOOLS on the left of the screen is the "clear and start over" function. Do that and just accept the fact that you will be starting your 2019 return all over from scratch.

If you can't or are unwilling start over, then I can't be of any help to you, unfortunately.

TurboTax dropeed the entire rental records, any thoughts on how to handle the two losses?

This is because you selected the option for "I did not rent or attempt to rent this property in 2019". If you select that option, then the program *FORCES* you to delete that rental property and all it's history entirely. The only possible way to get it back is to start the return over from scratch.

So DO NOT select that option. Assuming you did not live the property for one single day in 2019 as your primary residence, 2nd home or vacation home, you "MUST" indicate that the property was rented for "AT LEAST" one day. Then if asked for any personal use days, enter ZERO.

Now if this property sat vacant from the time the last renter moved out, until the day you closed on the sale, just indicated that the property was rented "the whole year" and you're good. There's nothing wrong with showing zero income either. Besides, zero income is exactly what you would show on the 2019 return if the tenant had pre-paid those two months for 2019, in 2018.

You can also go ahead and claim any rental expenses incurred in 2019 up to the date of sale. Just make sure you don-t double-dip by claiming an expense as both a rental expense and a sales expense.

I think the above covers all you need for now, as I am assuming you know how to correctly the report the sale of this property in the Rental & Royalty Income (SCH E) section of the program already.