I take a different position. the sales price should be allocated to each asset (land, building and improvements) based on there relative Fair Market Value at the time of sale. Admittedly this is easier said than done because it's virtually impossible (short of a component appraisal) to determine what the FMV is today of say an electrical upgrade that was done 10 years ago. TT really can't handle very well situations like this.
I've seen CPA firms handle a situation like yours in multiple ways after discussion with the client. This not make it right. Usually, they have an advantage in that their software is more sophisticated and allows them to do things not possible in TT.
1) do a mass disposition - all the assets costs including land are lump together as 1 asset and the related depreciation is combined so the 4797 shows only the sale of 1 asset. thus any gain first goes to depreciation recapture and then the excess is capital gain
2) all or certain components are allocated a sales price and cost of sale so there is no gain or loss. the rest is allocated to land and building (even how this is done varies from situation to situation)
do whatever you want, but TT does not guarantee accuracy as to allocations determined by client input.
