Commercial Rental Property Sale Breakdown

[K46732]

How do I break up sale price in "Sales Information" section?

• Asset Sales Price _____
• Asset Sales Expenses_____
• Land Sales Price_______
• Land Sales Expenses____

I was just given a 1099S and Seller's Closing Statement.  None of those documents break it down that way.

[PatriciaV]

The Closing Statement has all the sales information you need. The sales price is the gross proceeds (the price you agreed to sell for). Selling expenses are listed below.

The Asset is the Rental building itself. If you purchased the land, then built the building, you have basis in the land separate from the building and will need to split the sales price and selling expenses between the land and the building.

Otherwise, the entire sales price would be entered for Asset Sales Price. Likewise, the total selling expenses would be entered for Asset Sales Expenses.

Sales expenses include:

 - commissions
 - appraisal fees
 - broker's fees
 - legal fees
 - advertising fees
 - home inspection reports
 - title insurance
 - transfer taxes or fees
 - geological surveys
 - loan charges (points) or other fees paid on the buyer's behalf

Sales expenses do not include:
 - mortgage payoffs
 - home equity loan payoffs
 - rent-back costs
 - payoff to creditors
 - property taxes
 - home owner association fees

Additional info:

• How do I report the Sale of Rental Property?
• How do I handle capital improvements and depreciation for my rental?

[K46732]

Ok, thank you. 

If I co-owned (50/50) the property, I assume I just claim my half of the proceeds?

Also, the lot had been purchased by a relative and a partner, 30-40 years ago - they then built to spec, a building, that they rented to a commercial retailor.  After the partner passed away, I bought his half.  So my question is: do I still list sale proceeds under asset sales price (building) or include land?  

[Cynthiad66]

Yes.  You report your portion oft he ales proceeds.  Sale of the property includes the land, unless there is some agreement for the building only.

So include the cost of the land in the basis of the property when calculating total cost/basis.  This will reduce your taxable gain on the property.

Use the link attached for for more information on Cost of property:  Determining Basis of Property - IRS

@K46732