Investors & landlords

A few things:

 

The original cost of $360k should have been allocated between building and land.  Whatever was allocated to building would have been depreciated over 27.5 years, whatever was allocated to land does not depreciate, but you now add to your cost basis for this sale. If the total amount had been treated as the depreciable asset, you would have depreciated about one half by 2020, so your net cost basis would be about $180k.

 

Anything you added to the property will also be added as cost, but you should have added each the year these items were purchased, which means those items would also have been depreciated, but you may have expensed those items if they were repairs.

 

All the expenses of the sale will add to your basis also include these in cost of sale of the property if they were not put in until the sale.

 

Check form 4797 part III for the sale to see if these items show on there correctly.

 

Lastly be sure to check form 8582 from prior years to be sure you received the tax benefit of the loss, if you did not, this suspended loss will now be "freed" up to offset gain on this sale - it is no longer suspended, so check your current 8582 to see the carryforward of any suspended losses.