Sold my rental property.

Quick question, to save time.

Did you at least "attempt" to rent the property in 2020?

No, I did not "attempt" to rent it this year.

Be aware of this. If you select the option for "I did not rent or attempt to rent the property this year" then the program will force you to delete the SCH E, and you'll lose all the depreciation and PAL carry over loss history.

What you "should" do is show the property converted to personal use with a date of 1/1/2020. Then report the sale in the Sale of Business Property section. Several things will happen then.

1) None of your rental expenses are claimable or reportable on SCH E. You'll need to work through and remove them. (Exceptions follow)

2) If you make the proper selections, the program will pro-rate for you, the mortgage interest if you leave that figure in the expenses section, putting the "personal use" portion on SCH A as an itemized deduction.

3) Depreciation will be stopped on Jan 15, 2020 using the mid-month convention on the property, and the allowed convention of other assets based on the MACRS classification of the asset. (Could be mid-month also)

For reporting the sale in the "Sale of Business Property" section, any property improvements done after the last tenant vacated are just added to the cost basis of the property, and some of the other expenses "may" qualify to be added to that basis, or reported a part of the sales expenses incurred preparing the property for sale. Still other expenses might be addable to the cost basis as "carrying costs" of the investment property.

The more accurate option would be to print out both 4562's for that property from the 2019 tax return for the depreciation history, and the 8582 from the 2019 tax return for your carry over losses (if any) from the 2019 tax return. Then use that data for reporting the sale on the 2020 return in the Sale of Business Property section. Then just go ahead and delete the SCH E from the 2020 return.