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how to report sale of rental property owned less than 1 year at loss

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Level 2

I purchased and sold the rental property within one year at a loss. The net rental income is negative. I'm confused such loss is ordinary loss or capital loss. And how to report on form  4797, form 8949, and schedule D. Thanks in advance!

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3 Replies 3
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Employee
Employee

Hello survive8!

Rental income and the sale of the property are entered separately. 

Report rental income and expenses on the Rental and Royalty Income (Sch E) input screen. 

To report the sale of the property:

A. If the property is entered on the Depreciation screen:

  1. Go to Depreciation.
  2. Select the applicable Asset from the left navigation panel.
  3. Scroll down to the General Disposition Information section.
  4. Enter the date of sale in, Date sold, disposed, or retired (MANDATORY).
  5. Enter the Basis adjustment (land, etc.) [A]. (if applicable)
  6. Enter any Expenses of sale or exchange. (if applicable)
  7. Scroll down to the Sale of Asset (4797/6252) section.
  8. Enter the Sales price (-1=none).
B. If the property is not already entered on the Depreciation screen:
 
  1. Go to the Dispositions screen.
  2. Complete the applicable information about this sale:
    1. Description of property
    2. Date acquired
    3. Date sold
    4. Cost or basis
    5. Expense of sale
  3. Scroll down to the Form 4797 section.
  4. Enter any prior depreciation in, Depreciation allowed (-1=none, triggers 4797).
  5. Enter the Recapture amount (if not section 1245). (if applicable)

~Intuit Tax Product Specialist


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Level 2

Hi Ross,

Thanks a lot for you help. Now I know how to enter the information to the system. So such loss is only reported on form 4797, and it's 100% deductible against the ordinary income such wages? Do I still need to report this selling on form schedule D?

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Employee
Employee

I'll leave that to your interpretation and suggest reviewing the Schedule D instructions for more insight. 

When I complete those basic steps above (with an asset placed in service and sold in the same year for less than the cost) I do not generate a Schedule D. 




~Intuit Tax Product Specialist


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**Mark the post that answers your question by clicking on "Accept as solution"
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