How do I get 2 depreciating improvements (orig cost) added to line 21 of form 4797 (p 2) - it is only showing cost (of home) plus sales expenses (commissions)?

kcj1385 · ‎June 5, 2019

Say the cost of rental was 100,000, added 2 improvements, new roof (5K) and sewer line (2k); they have gone through a couple years depreciating. Sold the home for 150,000 in 2017 (line 20, pg 2 4757). So cost, 100,000, plus other basis (5,000+2,000), plus 20,000 in commissions should be what pops up in line 21 of pg 2, 4757 or 27,000, but all I am getting is the 100,000 (home cost) + 20,000 (commission). Any help is appreciated. thanks

KittyM · ‎June 5, 2019

You will need to "sell" the other two assets (the roof and the sewer line), as well as the house. You will allocate a proportion of the sales price to each of these items. Using your example:

Allocate 100,000/107,000 (100,000 + 5,000 + 2,000) or 93.45% of the sales price/expenses to the house.
Allocate 5,000/107,000 or 4.67% of the sales price/expenses to the roof.
Allocate 2,000/107,000 or 1.88% of the sales price/expenses to the sewer.

View solution in original post

kcj1385 · ‎June 5, 2019

Thank you. Once I did the additional "sells" that created "2" additional properties, Property B and C - applying the 93%, 5% and 2% to the gross sale overall (150,000) provided the Property A, B and C gross sales price respectively. Very nice. I appreciate the assistance.

How do I get 2 depreciating improvements (orig cost) added to line 21 of form 4797 (p 2) - it is only showing cost (of home) plus sales expenses (commissions)?

Investors & landlords

Investors & landlords