When it comes to entering sale of the property, please confirm that you are saying to use the same ratio as when I entered it into service. If I had established a 70/30 split when I put the rental into service, then my sales price would be entered as $220,500 for the asset. My land sales price would be entered as $94,500. Correct? Not really you have to take into consideration all of the assets combined... refer to my example.
That adds up to my sales price of $315,000 .... but I still have to deal with all the listed improvements. Yes you do ... all assets must be considered.
Now , how do I treat the sale of each improvement? Say the new front door/assembly cost me $5,000 when I originally listed it as an improvement. What do I put in the sale price for all these items? Again refer to my simple example ... total up all the assets and do the calculations for the ratios ... then use those % against the closing costs and sales price. Set up a spreadsheet just like I posted which is the same thing I was taught and have used for 30 years. Stop thinking about this too much and just follow the example.
