@RobertB4444
Thank you for reading through my scenario and response. I am not clear how to report depreciation.
Q6) "The new commercial property is the only thing that you are going to create ..." , I should go and create a new Rental Property (MD) in "Wage % Income > Rental Properties and Royalties". Correct?
- Next is to enter Replacement Property (in this case MD) profile (address MD, commercial, 2024 1st year rented
Q7 ) Do I checked "I bought this rental" or "I acquired this rental through a like-kind exchange"?
I am assuming I should check "I acquired this rental through a like-kind exchange".
- Now I have to enter "Assets/Depreciation"
Q8 ) My original question (Q4) is at this point, I have to "Add an Asset"
- Click on - Rental Real Estate
- Enter Date Purchased - 12/01/24 , Correct? this is the replacement purchased date.
- Click on - Non-Residential Real Estate and Improvements
- Click on - Nonresidential real estate
- Enter Cost (total cost) - Replacement Purchase cost (in my case. 1,050,000), Correct?
- Enter the land cost - 50,000 Bring over the relinquished property original land cost, Correct?
- Click on - I purchased this asset, Correct?
Q9) I don't think what I entered above is correct. The Depreciation detail shows the full depreciation for 1 month for the full replacement cost ( 1,050,000). My understanding is that I can depreciation the following:
a) The left over relinquished basis (or adjusted basis = relinquished cost - depreciation taken) = 480,000
b) The deferred gain (relinquished sold - seller cost - relinquished cost + depreciation taken) = 464, 000
c) The excess basis = replacement cost - (relinquished sold - seller cost) + replacement loan - relinquished loan = 1,050,000 - (1,000,000 - 56,000) + 300,000 - 250,000 = 156,000
What is the number to use for depreciation?
