The last 8824 I completed for our 2020 tax return did not have and a, b, c, for Line 25 on Form 8824, so this is new to me. Turbo Tax is forcing the total of Line 25 a, b, and c to foot to the entry for Line 25, which is the New Property Basis.
This forced equality confuses me because the entry for Line 25 is the New Property Basis to be used for calculating a capital gain/loss if we were to sell this property, while 25 a, b, and c, are the basis for depreciable assets.
25a: Basis of like-kind section 1250 property received
25b: Basis of like-kind section 1245 property received
25c: Basis of like-kind intangible property received
From the information I received from the sponsor, we received:
For 25a: $9,276 of 15 year Real Property (Section 1250) plus $209 of 27.5 Real Property (building improvements), which I take to also be Section 1250 property.
For 25b: $40,916 of 5 year Personal Real Property (Section 1245)
For 25c: No like-kind intangible property received (assuming the Mortgage Broker fee from the new property that I am amortizing does not count here)
The above totals to $50,851 and is far from the $205,496 which Turbo Tax calculated for Line 25.
We had no Excess Basis to depreciate according to my calculations.
We did have assets carryover from the property we gave up, such as the Building and "Furniture & Fixtures".
The Depreciation and Amortization Report generated by Turbo Tax for the property received shows a total of $242,461 for the cost of all assets. If I net out the prior depreciation for the assets carried over from the property we gave up, the Building and Furniture & Fixtures, I come up with $219,215 for the total value of depreciable assets for Day 1 with the new property.
So not sure where to go from here. Could give up and upgrade to Turbo Tax with Live Help. Or could just back into the numbers Turbo Tax is requiring by starting with the Section 1245 number given to us by the sponsor, the $40,916, and back into the Section 1250 number by subtracting the Sectoin 1245 number from the total Turbo Tax is expecting: $205,496 - $40,916 = $164,580. So ... complete Turbo Tax entries as follows:
25a: Basis of like-kind section 1250 property received: $164,580
25b: Basis of like-kind section 1245 property received: $40,916
25c: 25c: Basis of like-kind intangible property received: $0
This totals to $205,496, foots to Line 25, and Turbo Tax is happy.
Any thoughts?
Thanks in advance, Think57
