I did a 1031 exchange this year and am trying to figure out how to handle partially deprciated assets that are associated with the sold property. Here I’m talking about something like an HVAC system etc that was purchased in 2017 and thus has been partially depreciated.
In the depreciation dialog, TT asks "Did you stop using this asset in 2020?” Since the aseet was sold/taken out of service for any other reason, I think I should answer “yes”. A couple screens later I’m asked for the “sales price” and the expenses assocatied with the sale. Since the HVAC unit was not sold separately from the property, I enter “$0” for both sales price and expenses and TurboTax computes a loss amount and a depreciation amount for the HVAC.
Am I doing this correctly? Should I consider the HVAC unit as NOT "sold/taken out of service" since the property that it was a part of was sold in a 1031 and just continue to depreciate it in future years till it is fully depreciated?
