ThomasM125
Expert Alumni

Investors & landlords

All of the depreciation you have deducted on the assets will be "recaptured" to the extent you have a gain on the sale. By this, it means your gain will be taxed as ordinary income equal to the total of all of the depreciation deducted during the time you rented the property. You need to record the sale of the assets to accomplish this, that is why you need to go through each asset and report them being sold. You can report the sale amount as $0, accept for the house for which you enter the sale price, less the sale proceeds allocated to the land, which you report separately. 

 

The assets that were disposed of you need to report them as being sold for $0 using the date they became worthless.

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