First all improvements or repairs made in the year of sale are simply entered on the schedule e as repairs. You cannot enter them as depreciable assets or take depreciation if you put them in service and take them out of service in the same tax year.
Next for the sale of the assets, you must allocate the sales price and the cost of sale to all of the assets you have listed in the depreciation worksheet. This includes the land that was not appreciated but should be listed as an asset. The program will not do this for you you will have to think back to third grade when they taught you how to do percentages and divide the the little number by the big number to get the ratio. For instance when you put the property into service, and you allocated the $100,000 of the purchase price as 80,000 to the building and $20,000 to the land ratio was 20% for the land and 80% for the building. You will use the same ratios for the sales price and cost of sale. If you have more assets listed on the depreciation worksheet then you need to total up the unadjusted cost basis of all of them and prorate the sales price and cost of sale by the same ratio of the cost basis of the asset to the total cost.
