I initially entered zero gain for the roof, since I included all the gain in the house price.
The problem with no showing a gain on each individual asset, is that the depreciation recapture on all assets will not be properly dealt with and therefore taxed incorrectly. Entering $0 for the sale price on the roof means that the depreciation recapture on that gets included in the gain on the structure and incorrectly taxed at the "ordinary" tax rate, instead of the capital gains tax rate.
I've actually worked through scenarios like that a few years ago just see for myself how the program handles it. It's just a matter of "following the numbers" on all the worksheets in the program. Bad part it, the program doesn't "catch" this error, because the error checking appears to only look for mathematical errors, and not for mistakes such as this. As far as the program seems to be concerned with, so long as the math is right, you're good. But if the numbers are wrong, yet still "add up", it doesn't catch anything.
If I recall correctly, it's the SCH D and/or 4797 that shows the "bottom line" on both recaptured depreciation, and gain/loss from the sale.
