@DianeW777 , I am almost done. Thanks for your help so far. Just a couple of follow up questions. I installed a new HVAC & changed an appliance on 03/01/2022. I entered the HVAC and the appliance as Assets, but TT did not calculate any depreciation. Most likely because I disposed them within the year - I rented the property through 10/31/2022 and sold the property on 11/30/2022.
Questions:
- Am I correct in entering the HVAC and the appliance in the asset section of the rental, and prorating my gain and expenses across these assets as well? Or should I just enter them as a sales expense? By allocating my expenses across these assets, I am basically increasing the cost price. Is that correct?
- I added the difference between Purchase Cost and Rental Basis (256.5 - 235 = 21.5K) to the other Sales Expenses. Basically, I increased the sales expense by 21.5K. I hope this is what you meant.
- I am responding "No" to the question- "Was this asset included in the sale of your main home". Is that accurate?
- I prorated the sales price and the expenses as per the table below. By calculating the percentages based on the cost basis in TT and factoring ALL assets, I have effectively changed the percentage of Asset and Land of the Rental Unit. It no longer matches the township records. Is this what you proposed? Can you please confirm if my calculations make sense. I just want to make sure I understood your formula.
| Asset | Cost Basis from TT | Cost Basis % | Sales Price based on TT % | Expense allocation based on TT % |
| Rental - Home | $ 119,616 | 62.83% | $ 219,883 | $ 36,713 |
| Rental - Land | $ 57,692 | 30.30% | $ 106,051 | $ 17,707 |
| Other Asset 1 | $ 1,200 | 0.63% | $ 2,206 | $ 368 |
| Other Asset 1 | $ 1,492 | 0.78% | $ 2,743 | $ 458 |
| HVAC | $ 9,820 | 5.16% | $ 18,051 | $ 3,014 |
| Appliance 1 | $ 580 | 0.30% | $ 1,066 | $ 178 |
| TOTAL | $ 190,400 | 100.00% | $ 350,000 | $ 58,438 |
