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May 10, 2021
Question

Where do i enter the details of sale of rental property?

  • May 10, 2021
  • 2 replies
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When I go to the sale/depreciation portions of rentals, it only takes me through the assets to depreciate.  There is no info about the actual sale.

2 replies

May 10, 2021

To enter the sales and depreciation information, Edit each rental asset. 

  1. Type rentals in the search bar and click on Jump to rentals.
  2. On the Your 2020 rentals and royalties summary screen, edit the rental.
  3. On the Here's XXX rental property info screen, scroll down to Improvements, furnishing, and other assets and Edit.
  4. On the Your improvements, furnishings, and other assets screen, select an asset and click on the pencil icon on the right side.
  5. On the Do you want to go directly to your asset summary? screen, select Yes, I want to go to my asset summary.
  6. On the Your Property Assets screen, Edit the asset.
  7. On the Describe This Asset screen, select an asset category and continue.
  8. On the Tell Us a Little More About Your Rental Asset screen, select the category and Continue.
  9. On the Tell Us About This Rental Asset screen, confirm the information and Continue.
  10. On the Tell Us More About This Renal Asset screen, select The item was sold, retired, stolen, destroyed, disposed of, converted to personal use, traded in, or given away and enter the date sold.
  11. Answer the next question on the page and Continue
  12. Continue with the onscreen interview. On the Enter Asset Sale Information screen, enter the Sales Price and Sales Expenses.
  13. Continue with the onscreen interview until complete.
  14. Repeat this process for each asset. 
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May 10, 2021

These steps are just for the rental improvements in my file, I don't have the actual rental property itself as one of these assets in Schedule E, as the house itself is not depreciated. Do I mark each of these improvements as sold and then add the undepreciated amounts to my cost basis? Do I go to Sale of Business Property and input the rental property sale details there? 

February 2, 2024

Exactly my question now.  How did you do it ?  Did you zero out those improvements listed as assets and add that to the cost basis?

Carl11_2
Employee
May 10, 2021

Reporting the Sale of Rental Property

If you qualify for the "lived in 2 of last 5 years" capital gains exclusion, then when prompted you WILL indicate that this sale DOES INCLUDE the sale of your main home. For AD MIL personnel who don't qualify because of PCS orders, select this option anyway, because you "MIGHT" qualify for at last a partial exclusion.

Start working through Rental & Royalty Income (SCH E) "AS IF" you did not sell the property. One of the screens near the start will have a selection on it for "I sold or otherwise disposed of this property in  2020". Select it. After you select the "I sold or otherwise disposed of this property in 2020" you continue working it through "as if" you still own it. When you come to the summary screen you will enter all of your rental income and expenses, even if it's zero. Then you MUST work through the "Sale of Property/Depreciation" section. You must work through each individual asset one at a time to report its disposition (in your case, all your rental assets were sold).

Understand that if more than the property itself is listed in your assets list, then you need to allocate your sales price across all of your assets.  You will only allocate the structure sales price; you will NOT allocate the land sales price, since the land is not a depreciable asset.  Then if you sold this rental at a gain, you must show a gain on all assets, even if that gain is $1 on some assets. Likewise, if you sold at a loss then you must show a loss on all assets, even if that loss is $1 on some assets.

Basically, when working through an asset you select the option for "I stopped using this asset in 2020" and go from there. Note that you MUST do this for EACH AND EVERY asset listed.

When you finish working through everything listed in the assets section, if you ever at any time you owned this rental you claimed vehicle expenses, then you must also work through the vehicle section and show the disposition of the vehicle. Most likely, your vehicle disposition will be "removed for personal use", as I seriously doubt you sold your vehicle as a part of this rental sale.

May 10, 2021

Thanks, I have done all these steps, but as I mentioned the assets are only my improvements to the rental property over the years. Not the property itself. So should I input the property cost basis as one of these rental property assets, then close it out as part of the sale? I also had closing costs and have no idea where to input those.