@larisa322 , say when you bought the property for $100,000 the appliances were old. Then the following changes/ improvements took place: 4th year you replaced the stove for $800, 6th year you replaced the furnace for $2400 and then just before sale of the property you replaced the carpets with hardwood flooring for $12000.. Under ordinary circumstances all of these would be considered improvements but I would suspect that most people would claim the stove replacement as a repair ( because it probably did not change the value of the property.). Suppose further that you followed this ( non-puristic) path and claimed the stove as an expense but did remember to claim $2000 ( of the $2400) of the furnace as an improvement. Therefore you would have had an additional depreciation for the $2000 improvement. Now when you sell the property you include the floor replacement of $12,000 as part of the sales prep expenses, the depreciated $2000 for the furnace as the basis of the furnace and probably allocate the same amount as its contribution to sales price. Generally what you are trying to do is to the extent feasible allocate the sales price to the different components that you had depreciated ( i.e. recognized as individual assets) and allocate the land and the house as the bulk of the price -- which is generally true. IRS really does not care how it has been allocated as long as the total price has been accounted for. Your gain is on the total unless of course you sold the house+land and then sold the other assets ( say the stove ) separately--- in this case, yes you have to allocate its contribution and profit/loss line item by line item.
Are there any guidelines to follow ? I do not believe that you would find one , in the personal income area -- an entity selling its business assets definitely would have this asset by asset situation and its books would keep track of individual depreciation.
Just do the best you can , keep records of how you arrived at your figures. Good Luck
