Purchase price of rental $200000 (Building 170K, Land 30K)
Sale Price $250000
I understand I need to prorate capital expense. On what value do I need to prorate?
I made capital expenditure of $10K. When I add it as asset in turbo tax, which amount I should prorate capital expenditure against.
1. 10K/200K (sale price of building by allocating land price from county records $50K) – 5%
2. 10K/220K (sale price of building by keeping land price same as that time of buying $30K) – 4.5%
3. 10K/250K (total sale price including land) – 4%
