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emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2648
Experience:  IRS licensed Enrolled Agent and tax instructor
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I have had rental income from TN. Net was a loss. Never filed

Customer Question

I have had rental income from TN. Net was a loss. Never filed a tax return because we owned the property personally. We have now sold the property. Do we have to pay tax on that sale? And if so is it the net from our rental schedule or net from original purchase price/improvements?
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Customer: dont think so...
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Submitted: 11 months ago.
Category: Tax
Expert:  emc011075 replied 11 months ago.
Hi. My name is ***** ***** I will be happy to help you. When is rental is not personal any more. It is considered a business (income producing) property now. When you sell it, you will have to file TN return, even if the sale is a loss because the title company will most likely issue you 1099S. You will figure out your gain or loss using form 4797 - Sale of business property. You will have to take into account your purchase price, improvements, cost of sale (settlement charges) and depreciation you took over the years. The longer you have rented it the less likely you will have a loss since depreciation is reducing your basis every year.
Expert:  emc011075 replied 11 months ago.
I see you offline now. So if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. You find the rating bar on the top of the page – 5 stars. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.