I purchased a building for rental property several years ago. At the time of purchase, I set it up in Turbo Tax Home and Business on Sch E as rental property and entered the costs including closing costs, etc and date acquired for depreciation. Several years later, I refinanced the building. When I entered the refinancing, I set it up as an amortization intangible. It is now depreciating that way. I did not realize I did that. It is no longer showing as the regular Non residential real estate, but as an amortization intangible? The figures seem to be correct. The amount of depreciation transferred from year to year correctly. It just seems to be strange that the whole thing is categorized as an intangible? In answering the questions, I did not realize it would be set up that way. Anyway, now several years have passed since the refinance and I have sold the property and need to show the sale of the property. I am wondering which options I should take to approach my taxes.
1. Should I try to correct the classification and change it from an intangible to a nonresidential property?
OR
2. Should I correct the amount of the intangible so that it only shows the fees of the refinance, and then "add an asset "classified as an nonresidential property to show the actual cost of the building, less the refinance fees, and then do the cost basis and calculate the gain on it in the same section?
I would appreciate any help and discussion on this subject as soon as possible.
Thanks!
