ThomasM125
Expert Alumni

Investors & landlords

Technically, you would have to prorate the sales price amount the assets in order to property account for the recovery of depreciation necessary to reduce your capital gain income for the portion that represents depreciation recapture. Also, you would need to do this to account for the proper basis for the calculation of the total income on sale of the property.

 

What you could do is add up the cost of assets that are similar, such as improvements, and enter a new asset for the total cost of them. You will be asked to enter the prior year depreciation for them so you will enter that amount so you will have the correct cost basis. Then, you can report the sale of that asset and enter the sales price applicable to those assets and that will result in the correct treatment on your tax return.

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