Well, now where getting somewhere. Speaking with an Enrolled Agent certainly makes a difference for me because it is understanding the tax laws that I care about. Once I know the law then the math is simple. It is unfortunate that the certified Tax Specialist I have spoken with locally don't provide consistent answers.
Land is separate, but seems TT needs to disposition each asset individually and I see no way to add everything together, as the Tax Specialist I spoke with did with their software.
A few questions if I may.
(1) given all of the assets are related to the real property, is there any Section 1245? Example, is the roof 1250 but an appliance is 1245? Since they are all an integral part of the property when purchased and sold it would seem as if they were all 1250. I didn't really sell them separately.
(2) Is this course material available through the IRS?
So, 4797 speaks to Fair Market Value (FMV) when dispositioning property and allocating realized gains. Let me complicate the example somewhat. The FMV of the building and land at the time of purchase was 70/30 or $70,000/$30,000, respectively. This is what was used in the ratio example. Today, however, the FMV for the building and land at the time of sale was 40/60 or $200,000/$300,000. So, the building has appreciated less than 3x while the land has appreciated 10x. This is based on the Property Tax Assessments 22 years ago (at the time of purchase) and now (at the time of sale).
A few questions.
(1) Can I use the current FMV ratio for Building (including Assets) and Land? This would be more gain for the land and less for the building.
(2) If this makes sense, is reasonable and acceptable, then how would I disposition (distribute) the gain to among the Building and Assets. This is kind of why I took the original approach I did.
Thanks!
