The kitchen in my rental apartment has been destroyed by tenants. I have rebuilt it anew. Now I want to add the newly rebuilt kitchen as a separate asset item, segregate the old, destroyed kitchen from the asset and remove it from the depreciation schedule, since it no longer exists. My main objective is to get rid of the portion of the recaptured depreciation attributable to the destroyed kitchen. How do I do it? For the illustration, my (rounded for simplicity) numbers are as follows:
Original cost basis of asset, including lost kitchen: $300K; $200K is depreciable, $100K - land
Depreciation taken to date: $40K
Original cost of the kitchen part of the asset (already estimated) $20K
Depreciation attributable to the original kitchen: $4K
Cost of newly rebuilt kitchen, net of insurance proceeds: $10K
What I am hoping to get is three entries in the depreciation report:
Main asset without old kitchen: $180K depreciable, $100K land, depr. to date: $36K, original date in service.
Old kitchen: $20K, depreciation taken to date: $4K; original date in service.
New kitchen: $10K, depreciation to date: $0, date in service - this year.
And then I would remove the old, destroyed kitchen as a casualty, taken loss on it, but without having to recapture depreciation. Would it work and how to enter this into TT Premier?
