We have a few assets that were with the rental that were part of the sale (washer and dryer, fridge). We did not break out the costs of those in the sale of the house... they were just included in the package.
You need to allocate some of your structure sales price, to each individual asset, just as it states to do so in the guidance I provided above.
When going through each asset as to when it was sold/disposed/etc under special handing it asks if it was a gift, it if was included in the sale of the home.... which is the correct option?
You specifically stated that it was a part of the sale. So you must select NO on that screen, and then you will be prompted for the sales information. As a reminder, a few repeats of what I've already provided above.
- Under no circumstances will any portion of the sales price of the land be allocated to anything else. Thats because land is not a depreciated asset. Only the structure and other items sold with the structure are depreciated.
- You will allocate a portion of your structure sales price, to the other assets you have listed in the Sale of Assets/Depreciation section.
- If you sold at a gain, then you *MUST* show a gain on each and every asset. Even if that gain is $1 on some assets, and $1000 on other assets.
- If you sold at a loss, then you *MUST* show a loss on all assets. Even if that loss is $1 on some asset, and $1000 on other assets.
The amount of the gain or loss on each asset doesn't matter so long as it's either a consistent loss on all assets, or a consistent gain on all asset.
- The total of the loss or gain on all assets will add up to your total gain or loss on the sale.
If you show a gain on some assets, and a loss on other assets, the program just flat out can't handle that correctly because of the depreciation you are required to recapture on all of your depreciable assets. Bottom line is, the SCH D and/or 4797 *will* be wrong.
