Carl
Level 15

Investors & landlords

@CECPAD 

Did you take SEC179 or the Special Depreciation Allowance on any of those assets?

I assume you sold the property at a gain. If that assumption is wrong, then please state so.

Did you show a gain on every asset? To do so, your sales price for each asset must be at least $1 more than the original cost basis of that asset as shown on the 4562 under the "Cost (Net of Land)" column. (Your sale price for the land must be more than the cost shown under the "Land" column.)

There is a limitation of what the program can do, and it's not a bug. It's a limitation. If you show a gain on some assets and a loss on others, the program just flat out can not deal with it correctly on the mathematical front. You'll end up paying capital gains tax on recaptured depreciation that should be taxed at the ordinary income tax rate.

Finally, on the 4562 titled "Depreciation and Amortization Report" do you have any amortized assets listed under the Asset Description column? Typically, your financing or refinancing fees will be listed here under "Amortized Assets" if you entered those fees correctly when you acquired/refinanced the property. Amortized assets are not "sold" per-se. They're handled differently.