I am needing some assistance to fill out Form 4797 for the sale of our rental home, as there was a loss.
Here's the details and my questions:
Home originally purchased in 2008 for 190,000 and we lived as personal property until 2012. We made improvements to the home during this time.
In 2012, we converted property to rental property. This property sold in 2013 for $164,000.
I'm trying to figure out when it asks for the date of when home was purchased, do I enter the 2008 date or the date that is was converted to rental property? As far as the original purchase price, I'm assuming I figure the FMV (basis) price at time of rental conversion. I'm a little confused as to how to calculate depreciation for this when asked. Just a note, we also had to come up with cash out of pocket to pay off the loan when we closed, so there were substantial closing costs at time of sale. Is this entered anywhere or is it irrelevant?
Thank you for you help, I'm trying to make sure I calculate the correctly.