Rental property incurred a terminal loss - the online version of TurboTax Premier does not automatically zero-out the UCC and record on line 9948.

[akadar85]

I disposed of a rental property this year and unfortunately incurred a terminal loss. The online version of TurboTax Premier does not automatically zero-out the UCC and record on line 9948. Per Chapter 3 of Guide T4036, " In the year you dispose of your rental property, you can subtract this terminal loss from your rental income and, if the loss is more than your rental income, you can create a rental loss. Enter your terminal loss on line 9948, “Terminal loss,” of Form T776." Can someone please help?

[TurboTaxJeffrey · Accepted solution]

Show the property disposed of for the amount currently on the books, and report the terminal loss as part of your 'other' expenses.

[akadar85]

I am a bit confused by that suggestion. I never claimed CCA in the past (as I wasn't expecting to incur a loss and possibly have to deal with recapture). I have recorded it as disposed of, but there remains a UCC that is not getting zero'd out by the terminal loss...

[TurboTaxJeffrey]

It is fine if you haven't claimed CCA.  If the property was valued at $200,000 for instance show it being disposed of for $200,000 and as I said enter the terminal loss as an 'Other expense'.  You calculate the terminal loss yourself...if you sold the property for $190,000 then you include $10,000 as the expense.

[akadar85]

Is this a program error? I agree that I will obtain the same result [Terminal Loss should be included as part of rental income/loss in year of disposition], but it won't show up on the right line [9948]. Thanks for helping out!

[TurboTaxJeffrey]

No...this is the way to zero out the class so it shows properly on the actual forms, and claiming terminal loss as an Other Expense is normal.  9948 is more if you have a partner and you had claimed different CCA over the years.  The percentage that can be claimed is the maximum...there are scenarios where each partner might claim less.  This doesn't apply in your case...hence just use the method I explained.

[dhhj]

My wife and I sold a rental property (we are 50/50 partners) and we have different CCA amounts (UCC). In the above answer you said line 9948 is used for my case. So how do I get the online version to work and properly put our different terminal losses into the right line?