So, other Sales Prices number could have been used in your example as long as the 2 criteria you explained are met?
Yes. It doesn't matter the amount of capital gain I show on any specific asset. In the end, the capital gains total will be the same. I could have shown a $1 gain on the structure itself with a sales price of $77,001 and a sales price of $72,999 on the HVAC. That column still totals up to $200,000 and there's no change to the amount of recaptured depreciation correctly taxed at the ordinary tax rate.
For the Sale Expenses, it appears that you used the 70/30 cost basis allocation for the structure and land to calculate the respective Sales Expenses. Because the HVAC and Windows were improvements, they would have no respective sales expenses correct?
I used the same allocation of the sales expenses between structure and land, as I used for the cost basis between structure and land. Now I very well could have allocated some of those sales expenses to the other assets. But I'd have to be sure that when the program deducts those sales expenses from the sales price of that asset, I did not end up showing a loss on that asset.
even though there will be no depreciation on them since I held them for less than 1 year.
Understand that for that to "take effect", you would have to sell the asset in the same calendar year you acquired it, or put it in service. So if you acquired and put into service the HVAC in say, Sept of 2021 and sold the property in May of 2022, you have to claim/recapture depreciation since it crosses a calendar year.
It appears that I should have defined additional asset entries for the HVAC and Windows under the Sale of Property/Depreciation section?
If the assets were acquired in 2022 and sold in 2022, no need. If I recall correctly (I may be wrong here), somewhere in the process of reporting the sale, you have an opportunity to enter "increases/decreases in basis" so you can enter the cost of those assets that qualify for exemption from depreciation, and the program (not you) will add it to the cost basis. In case I'm wrong, keep reading.
Basically, if the asset was acquired in 2022 and sold in 2022, there's no need to enter them in the assets/depreciation section. However, the program may not allow for a change in basis without doing so. If that's the case, and you did "in fact" acquire and sell the assets in the same tax year, then enter the asset in the Assets/Depreciation section with an "in service" date of the closing date of the sale. If any depreciation is taken for that one day, it'll be so minimal that it won't matter and you won't care.
