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where to enter depreciation recapture (which form, and line, etc.)?

Forum|Forum|6 years ago
January 12, 2020
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I have sold one of my 3 rental properties in 2018 (did not attempt to rent for 2018, straight going for sell, and it was sold in March 2018). This property was placed for rental in late 2015. For 2016, I have passive loss allowed. However, for 2017 and 2018, I am not allowed to take passive rental loss, therefore I have accumulated suspended passive loss.

So, I assume since I've sold the property in 2018, I can deduct my suspended passive rental loss. However, I still need to report all the depreciation (2016,2017,2018) as a form of depreciation recapture. The amount should be treated as regular income? If so, where should I enter it at TT?

Many thanks.

Best answer by Critter

Ok ... so you had a rental property that sold in 2018 so you must be completing the 2018 return. In the Sch E section for the sold rental you will indicate it was sold in the asset section and the depreciation recapture will be done automatically on the form 4797. You must indicate the property was a rental for just 1 day so the sch E is produced and not removed. Follow the screen instructions carefully and the suspended losses will also be released.

CritterAnswer

Employee

Ok ... so you had a rental property that sold in 2018 so you must be completing the 2018 return. In the Sch E section for the sold rental you will indicate it was sold in the asset section and the depreciation recapture will be done automatically on the form 4797. You must indicate the property was a rental for just 1 day so the sch E is produced and not removed. Follow the screen instructions carefully and the suspended losses will also be released.

G

GreenApple123Author

Sorry, I meant the property was sold on 3/19 and I am working on the TurboTax 2019.

I did all that except the 4797 only deducted the suspended passive rental, it did not recaptured depreciation for all the passed years. Besides, these recaptured depreciation is supposed to be treated as regular income? If the amount are to be included on 4797, that will be governed by capital gain rules?

much appreciated