Since the improvements were completed in 2021 to sell the property you should enter them as part of the sales expenses and this will become part of the cost basis before applying the selling price and will reduce the gain on the sale (Section 1250 Property).
Delete the improvements as an asset and the correct end result will take place. Also remove it from the Land category.
Use the following example and information to arrive at the correct selling price for each asset that is on depreciation.
Use the original cost of each asset listed on depreciation, add those together then divide each one by the combined total to find the percentage of the cost for each asset. Use that percentage times the sales price and sales expenses to find the selling price/sales expenses for each asset.
Example: Original Cost (of each asset on your depreciation schedule)
$10,000 Land = 13.33%
$50,000 House = 66.67%
$15,000 Improvements = 20%
$75,000 Total = 100%
Multiply each percentage times the sales price/sales expenses to arrive at each individual sales price/sales expense.
Please update here if you need further assistance.
@loellen1
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