Depreciated assets recapture

[jonpagel]

Sold a rental for a gain….lots of assets stored in TurboTax….examples

Let’s say the sale price of the house was $100,000…turbo wants to sell each asset you have…I can put $100000 for the residential and it brings in that depreciation for recapture….let’s say the dishwasher I bought new for $1000 and took the 100% special allowance in that year….I feel like that depreciation needs to be recaptured as well but how do I make turbo do that?  I imagine giving it a sales price but it was sold with the house so I don’t know how to allocate it…..would I put $1001 for it and all the non residential assets to show $1 over their basis?  If I did that I would put $100,000 minus all those sales prices in the residential sales box?

residential

dishwasher 

[DavidD66]

I suggest you assign each of those other assets a sales price of zero.  They will have no gain and no loss.   You will then allocate all of the proceeds to the house and the land.  They will show all of the gain, and the depreciation recapture will come via the gain on the house.  If you apply a sales price of $1,001 for the dishwasher, you will have a gain of $1,001 on the sale of your dishwasher, as it has a cost basis of $0 after taking the bonus depreciation of 100%.  

[Mike9241]

to dispose of an asset you must indicate it was sold and allocate the FMV on the date of sale. so that $100k must be allocated among land, building, dishwasher, whatever relative to their Fair Market Value 

you may want to visit this webpage for suggestions. not saying they're right but it should give you some ideas.

https://areaappliancerepair.com/determine-good-price-used-home-appliance/ 

[Carl]

I suggest you assign each of those other assets a sales price of zero.

Wrong move. If you do that, then the depreciation on that asset will not be recaptured and taxed at the "ordinary" income tax rate. Instead, it will be included in the gain and taxed at the capital gains tax rate.

You need to allocate your sales price across all assets. Take special note that since you sold at a gain, you must show a gain on all assets. Doesn't matter if that gain is $1 on some assets, and $100,000 on other assets. The point is, that's the only way the program will properly and correctly recapture and tax depreciation at the "ordinary" income tax rate.

Note that showing a sales price of at least $1 over the original price paid (as shown in the COST box) is all it takes to ensure proper and full recapture and the correct taxation of depreciation.

When done, the sales price of all assets should add up to your total sales price.

[jonpagel]

Ok that is what I thought would work…so basically any depreciation I have ever taken on any item is supposed to be recaptured at taxed at the 25% in my case….even things that I took the special 100% for or have been fully depreciated? For all of them I can just plug in $1 over the original cost for their sale price and then add those numbers up and subtract it from the total sale price and enter that for the main property depreciation sale price….basically all the sale prices on the sheet will add up to what I sold the house for..