Example of arriving at the selling price and sales expenses for each asset in your rental activity.
Example: Original Cost (of each asset on your depreciation schedule)
$10,000 Land = 13.33%
$50,000 House = 66.67%
$15,000 Improvements = 20%
$75,000 Total = 100%
Multiply each percentage times the sales price/sales expenses to arrive at each individual sales price/sales expense.
Passive Activity Loss Entry- For unused passive losses (if applicable):
Assuming your passive losses were carried over each year, this will be a separate and identifiable entry which will carry to the Schedule E. The full remainder of passive loss carryover is used in the year of sale as an expense. This is combined with your overall rental gain or loss to your Form 1040.
When you are on the screen 'Do any of these situations apply to this property?' (Property Profile section), be sure to check the box under Carryovers.
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