I am using Turbo Tax Premier on Desktop (Windows). I need help in reporting the sale of rental property in 2022. Here are the details:
- Bought a townhouse (property 1) as primary property in Oct, 2007 for $256, 500.
- Lived in the property (primary residence) through March, 2015. Bought a new primary residence in 2015, and put the previous house (property 1) for rent in 2015. FMV at the time of rental conversion was $235, 000. The Asset and Land percentages were entered as per the township tax record, about 75/25.
- Rented property 1 from 2015 to Oct, 30, 2022.
- Sold the rental property (property 1) on Nov 30, 2022 for $350, 000. So, for 1 month (Nov, 2022), the property did not have any tenant when I was fixing inspection items. The property was already under contract prior to the tenants moving out.
- Closing costs for sale were $18,000 and additional required repairs were $1,600
- In March, 2022, I updated the Furnace, AC for $9820, and other appliance for $600.
- I have few assets that is being depreciated, such as carpet, and a new concrete patio.
- Property 1 depreciation is around 49K (including 2022)
- When property 1 was for personal use, I had updated my Kitchen, windows, doors, for around 14K. I did not enter this in the asset section, since I assumed the upgrades to be part of the FMV at the time of the rental. So, no depreciation was taken on these capital improvements.
- My expense (recording, title, attorney, etc.) during original purchase in 2007 was refinance was around 3.2K. I am not sure if this can be used, but just mentioning it here.
My cost basis when placing the property for rental use in 2015 was lower than the purchase price. I need help in TurboTax to report this sale of rental property correctly, so that I don't overpay my taxes. Looking at similar questions on this community forums, I see some people recommending reporting the sale in the rental section using the asset and sale of property/depreciation section OR using the Sale of Business Property section. I have tried both options, and get different results.
Could someone tell the correct way to enter the sale information. I'd highly appreciate if someone walks me through the steps to show this sale of rental property - where would I enter the cost basis, and what needs to be included in the cost basis, sales expense, etc.
