Investors & landlords

Carl · ‎March 24, 2020

What I’m doing is showing a gain of $1 for each asset. For instance, the cost of the washing machine was $261. So I’m entering a sold price of $262. TT does its calculations and tells me I have a gain of $247 for the washing machine and increases the amount of taxes owed. That doesn't seem right to have that large of a gain for an old appliance.

That is correct. You took $246 of depreciation on the washer is years past. You now have to recapture that depreciation and pay taxes on it. You don't have a choice.

Do I enter the sales price of the property as $250k-$262? And then of course minus the sales price of the refinancing fees and dishwasher?

Yes. But it's more detailed than that. On the sale of the property you have to allocate your sales price to the land and the structure. So if your cost basis on the entire property itself as listed is $150K you have to allocate your sales price of $250K across the land sales price and the structure sales price.

So if your land cost basis is $50K and the structure cost basis is 100K you could allocate $60K of your sales price to the land (shows a 10K gain) and the remaining $190K to the structure which would be a $90K gain on the structure.

Remember, land is not a depreciable asset. So you will not change your land sales price *for* *any* *reason*.

Now of the $190K sales price of the structure, Subtract $262.00 from that and allocate that $262.00 to the washer.

So your structure sales price would be $189,738.00 (which still shows a gain) and your washer sales price would be $262.00 which also shows a gain.