Hi Carl,
I've read many of your posts on this subject regarding disposition of depreciated assets with regard to the sale of a rental property which has appreciated. You often say one of two things I believe:
1) Answer YES to the "Special Handling Required?" question so that you won't be asked about sales info, or
2) If you DO NOT say YES to the"Special Handling Required?" question (and therefore you are asked to input a sales price), if the overall asset (say a rental property) has appreciated, when disposing of an appliance like a refrigerator, you have also said that a person should enter a sales price of $1 more than the original cost basis of that asset (so it does not cause problems when you recapture depreciation).
I'm confused - which one should I do?????
Also, regarding the second option above, what if that asset (refrigerator that originally cost $1000) has depreciated to $0 over many years? Should you enter the sales price of $1001 or $1 (current value has depreciated to 0)?
Thanks!
