Thank you for the earlier information that was provided.
The examples helped to explain the allocation required for land, building and appliances.
I am able to determine the allocation for the sales price and cost for the Land and Building.
However, I am not sure what Sales Price I would put on the 2 appliances.
One is in the 4th year (washing machine) and the other is in the 5th year (built in microwave) of depreciation.
I would not think they would have much of a sale value.
I have 2 appliances with depreciation taken of $840.81, and depreciation not taken of $143.61.
It would be reported as appliance under Property B and appliance under Property C.
Is the $143.61 that was not depreciated added back to the basis of the building or how is this treated?
I was thinking of using zero as the sales price or could use the remaining value of $143.61 that has not been depreciated and would zero out for gain on each. The $143.61 would be removed from the building purchased price and assigned to the appliances as well as the depreciation.
Example on one appliance:
For the cost I only used the actual cost of the appliance.
Gross Sales Price $101.57
Appliance Cost $767.93
Depreciation Taken $666.36
Adjusted Basis $101.57
Total Gain $ 0.00
This amount would get reported again on line 31 of Form 4797 as $0.00.
Would this calculation work or what would be your suggestion on how to best report this.
Does this take care of the required recapture depreciation on this item which is reported on line 22 and again on 25a as depreciation allowed. Does this depreciation that was taken on this one appliance need to be reported anywhere else?
Again, appreciate your help with this.
