I've read so much that seems conflicting. Here's the scenario:
Rental property - owned 35 years, rented the last 30 years.
Last year we sold it. However, the last renter (successful 29 years, burned badly last year) pretty much destroyed the place. We had a lot of repairs before selling and also improvements (new roof, new appliances, new flooring, etc.)
Based on what I'd read, I thought I was to manage the property as I always have in TT - that is, report the year's income (only one month income he paid in January but dude stayed and would not leave until JUNE!), then add in improvements (added each in as an asset with price and start dates - all in June/July), then report sale of the property (so each new asset I entered is placed in service either in June or July, but all show sold 9/1/2023 (closing date). And for the selling price of each asset, I just noted it as the actual price that I paid for it (this seemed easiest way for it to just equal out - and basically ends up showing each of these as a loss for the price we paid).
Example: $3200 for new AC - I added the new asset (AC), cost ($3200), 0 cost for land, date of purchase is date of purchase (7/7/2023)
Then next section I checked "I purchased this asset" AND I also checked "This item was sold" (both are true).
Date sold: 9/1/2023
Always used as 100% business (starting date 7/7/2023)
No Special Handling Required
Asset not included in sale of main home
Sales Info:
Sales price: $3200
Sale expense: $3200
Land Sales Price: $0
Land Sales Expense: $0
Is that correct?
1.) Asking because I just read elsewhere on this TT Community Forum that I should be adding a dollar to each of the asset's sales price (which makes zero sense to me - but basically I read if $3200 for AC (or roof or whatever), then $3200 is my cost, but when I get to disposition sale amount I should put in $3201 for the asset sales price and asset sales expense and 0 for land). Why? This makes no sense to me. Or I totally misunderstood what I read.
2.) But? Then I also read that I did ALL THAT WRONG and should not have added them as assets at all and should just...well, I am not sure but I think what I read was telling me to add the totals all up and just list the total as a selling expense of the home. That seems crazy to me and a sure fire way to get audited to just have some random big number there without listing the details.
Help?
Thanks!
