I believe that an asset is characterized as 'given away' by entering a zero sales price. But this will generate a loss, and will conflict with the entries on Form 8824. I filled out 8824 manually with my own adjusted basis calculations which included asset depreciation through the date of sale. I did this manually because I relinquished two properties and purchased one replacement property (don't think the step-by-step handles this according to my conversations with TT support). The result was carried to Schedule D (there was a small amount of boot).
To generate a 4797 loss (or series of losses - one for each asset entry) would generate a loss "outside" the 8824 bottom line/adjusted basis. It seems that I should merely enter each asset as being sold for the remaining basis on the date sold, which is the original cost less depreciation through the sold date as calculated for the year of the tax return when I entered the sold date on the asset entry. Is this correct?
Further to this: Since my gross selling costs were included in the manual 8824 calculation, I entered a zero expense of sale on the asset entry worksheets. This way there is zero gain or loss on the asset entry and propagated to the 4797 and the whole transaction "falls back to" the manual entries on 8824 as transferred to Schedule D.
And, YES, I used a QI for the complete transaction.
