If the sold property was co-owned with another taxpayer, you will need to split the sale information between your return and theirs. Allocate based on percentage ownership.
If you have more than one rental asset that was sold, allocate your portion of the sales proceeds/expenses based on the adjusted basis of the assets. Include all depreciation taken for the assets (regular, Sec 179, and Special).
Here is an example of how to allocate a rental sale (home and land):
- Total Adjusted Basis: $80,000 for home & improvements (net of depreciation); $20,000 for land ($100,000 total)
- Percentage of Land Basis: $20,000/$100,000 = 20%
- Total Sales Proceeds (gross sales price) = $150,000
- Sales Proceeds for Land = 20% x $150,000 = $30,000
- Sales Proceeds for Home = $150,000 - $30,000 = $120,000
- Total Selling Expenses = $10,000
- Selling Expenses for Land = 20% x $10,000 = $2,000
- Selling Expenses for Home = $10,000 - $2,000 = $8,000
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