Sale of Rental Property

Forum|Forum|5 years ago
February 27, 2021
1 reply
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I sold my rental property and trying to walk through TurboTax to dispose the asset. I've already entered in the rental income, taxes and expenses for the property as normal, but I'm confused as to what to put in the

Asset Sales Price
Asset Sales Expense
Land Sales Price
Land Sales Expense

I believe that if I look at the sellers column of my closing statement, I should get the values stated. Please confirm that my understanding is correct. I believe:

Asset Sales Price should be:

-) Sale Price of Property

Asset Sales Expense should be:

-) Seller paid closing costs per contract

-) Title - Deed Preparation Fee

-) Title - Settlement/Closing Fee

-) Title - Seller Wire Payoff Fee

-) Real Estate Commission - Buyer's Realtor

NOT included in the sales expense should be the Lender: Payoff of First Mortgage Loan

Finally I should leave Land Sales Price and Land Sales Expense empty as there was no additional land in the sale... just the house.

Thanks in advance for your time

Best answer by ColeenD3

You almost had it. Unless you have a situation where you paid only for a building with no land attachment, you do it correctly. However, most real estate includes land. When you initially set up the asset, you should have subtracted the land value. It may have been 10% of the cost or 75% of the cost. Land values vary depending on location and the house itself might not have been worth much.

When you sell, there is also an allocation between building and land. The land % of the sales price may have increased or decreased over the years.

You would allocated the sales price to the percentage of the land as appropriate.

Closing costs (Title fees, real estate commissions, documentary stamps, credit report costs, costs of an abstract, transfer taxes, home inspection, flood certificate, attorney fees, etc.), instead of being deductible, reduce the sales price of the property.

NOT included in the sales expense should be the Lender: Payoff of First Mortgage Loan-YES

Title fees
real estate commissions
documentary stamps
credit report costs
costs of an abstract
transfer taxes
home inspection
flood certificate
attorney fees, etc.

ColeenD3Answer

When you sell, there is also an allocation between building and land. The land % of the sales price may have increased or decreased over the years.

You would allocated the sales price to the percentage of the land as appropriate.

NOT included in the sales expense should be the Lender: Payoff of First Mortgage Loan-YES

Title fees
real estate commissions
documentary stamps
credit report costs
costs of an abstract
transfer taxes
home inspection
flood certificate
attorney fees, etc.

ndegroffAuthor

Thanks Coleen,

When I set it up in Turbo tax, It did have the land separate from the asset. I checked the land value in PVA and it has not changed (In PVA at least) since I purchased it. According to your message I should subtract that land value from the sale value.

As for your comment about closing costs, I should put that on the Asset Sales Expenses line:

Please verify this is correct.

Irene2805

You are correct!

If you have assets other than the house itself (new roof, new deck, improvements, etc.) you will have to apportion the total sales price among the house, land, and any assets that may have been entered separately (for example new roof, new appliances, improvements).