![]() Don't know it for a fact, but this "may" contribute to losses not being used, even though they are released. Instead, it's included in the capital gain and you are taxed on it at the higher capital gains tax rate, instead of the lower "ordinary income" tax rate. When you do that, the depreciation on those assets you entered $0 for is not recaptured. ![]() TurboTax folks keep saying you can enter your total sales information on just the property entry, and a sale price of all remaining assets as $0. Ditto the opposite of above if you sold at a loss. If you sold the property at a gain, then you must show a gain on all assets, even if that gain is $1 on some assets, and $100,000 on other assets. In the Property Profile section (2 screens in I think) if you do not select the option for "I sold this property", then your PAL carry overs will not be released. This may happen if you have multiple assets and did/didn't do any one of several things. It hasn't taken the passive activity losses into account (or do I think so?). 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. 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. Note that you MUST do this for EACH AND EVERY asset listed. 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.īasically, when working through an asset you select the option for "I stopped using this asset in 2021" and go from there. 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. You will only allocate the structure sales price you will NOT allocate the land sales price, since the land is not a depreciable asset. 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 must work through each individual asset one at a time to report its disposition (in your case, all your rental assets were sold). Then you MUST work through the "Sale of Property/Depreciation" section. When you come to the summary screen you will enter all of your rental income and expenses, even if it's zero. After you select the "I sold or otherwise disposed of this property in 2021" you continue working it through "as if" you still own it. One of the screens near the start will have a selection on it for "I sold or otherwise disposed of this property in 2021". Start working through Rental & Royalty Income (SCH E) "AS IF" you did not sell the property. 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. 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. Otherwise, here's the guidance on reporting the sale of rental property. If you in fact, did not depreciate the property then you have a major issue that is compounded even more if your state also taxes personal income. You need to run (don't walk) to a tax professional for help with this. Ummmmmm, if you don't have anything in the assets/depreciation section, that's an indication that you haven't been depreciating the property each year as required by law.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |