Line 32 from Asset Entry Worksheet is not carrying correct amount over to Form 4797 line 6

[kries6]

I sold residential rental property.  There seems to be a discrepancy between the amount of gain calculated on Line 31 and 32 of the Asset Entry Worksheet ($241,028 - which I agree is the correct amount) carrying over to Part III, line 6 of Form 4797 (which shows $287,900 as the gain).  Is there a glitch in my program?  If not, please explain.  Thank you!

[PatriciaV]

Please confirm that the Total Gain that appears on Form 4797 p2 Line 24 for this property does not match the amount on Asset Wks Line 31.

Also, compare the values used to calculate the gain/loss on Form 4797 Line 24 (Gross sales price, Cost plus expenses, and Depreciation) are the same as those from the Asset Wks. Note the amount on Line 21 is the total of your original purchase price plus the selling expenses.

[kries6]

Thanks, Patricia for your help! I really, appreciate it!

This will confirm that the total Gain that appears on Form 4797 p2 Line 24 does NOT match the amount on Asset Wks Line 31.  Form 4797 p2 Line 24 amount is 288,234 while Asset Wks Line 31 is 241,028.

These are the amounts from the Asset Worksheet:

Line 4:  Total cost when asset was acquired:  71,209

Line 8:  Total amount of land included in cost:  490

Line 10: Prior depreciation: 22,182

Line 11: Depreciation deduction:  1,821

Line 21:  Asset sales price:  330,000

Line 22:  Asset expense of sale:  41,766

Line 31:  Gain or loss:  241,028

Line 52:  Depreciable basis:  70,719

Line 57:  AMT depeciable basis:  70,719

This is what Form 4797 reflects:

Line 20:  Gross sales price:  330,000

Line 21:  Cost or other basis plus expense of sale:  42,100

Line 22:  Depreciation (or depletion) allowed or allowable:  334

Line 23:  Adjusted basis :  41,766

Line 24:  Total gain:  288,234

Line 25a  Depreciation allowed from line 22:  334

Line 30:  Total gains for all properties:  288,234

Line 31:  Add property columns A through D, etc:  334

Line 32:  287,900 (this is the amount then entered onto Line 6)

Could you provide some clarity?  Again, thanks for your help!

[PatriciaV]

The gain on Form 4797 does not appear to include the adjusted basis of the building or the land ($47,206). But without seeing all the related entries, it's not possible to identify the source of this difference. It would be helpful to have a TurboTax ".tax2021" file of your return (with no personal information) for further review.

If you would be willing to send us a “diagnostic” file that has your “numbers” but not your personal information, here are the instructions: 

Please go to Online in the TurboTax header. 

1. Choose Send Tax File to Agent.
2. You will see a message explaining what the diagnostic copy is.  Click Send on this screen and wait for the Token number to appear. 
3. Reply to this thread with your Token number.  

This diagnostic copy (numbers only; no personal info) of your tax file will allow us to see the same experience you are having. If we are able to determine the cause, we'll reply here and provide you with a resolution. 

[kries6]

Hi Patricia!

I'm using the desktop/CD version of Turbo Tax.  When I click Online, it does not give me the option of Send Tax File to Agent.  I would be happy to share the diagnostic file with you, but is there any other way to do it?

kries6

[PatriciaV]

Please clarify that you're using Online from the black bar at the top of the TurboTax window. What other options do you see?

[kries6]

Patricia, sorry for the delay in getting back to you.  My last email, the one saying I didn't have an option to "Send to Tax Agent" was incorrect.  I've now found that option and did just send you the diagnostic file.  My token number is 973945.  Do you need anything else from me?

kries6

[PatriciaV]

That's it for now. We'll take a look at the diagnostic file and post here if we find a solution.

[PatriciaV]

I apologize for the delay in responding. Since most of the identifying information was scrubbed from your return, I reviewed the sale of the property that was placed in service on 5/1/2012.

Bottom Line: The amounts shown on the two related Asset Wks forms carry over to Form 4797 Line 24 as expected.

The Asset Wks for the Residential property (original cost $71,209) has no sale information. However, the Asset Wks for the Washing Machine has a sales price and selling expenses. The gain on that sale is $288,234. The Asset Wks for the Carpeting has a zero dollar sale with a zero gain.

If you open the Disposition Report for this property, you will see sales for Carpeting and Washing Machine, with the same total gain of $288,234.

Finally, on Form 4797 p2 (Copy 1), you will see $288,234 on Line 24, less depreciation on Line 25b, for a net gain on Line 32 of $287,900.

I was not able to find an Asset Wks with a net gain of $241,028.

Generally, the total sales proceeds and selling expenses are reported for the asset with the largest adjusted cost basis. If you have other assets with basis remaining, the sale should be allocated to all assets that were sold, as a percentage relating to the total basis. However, you can report a zero sale as you have done with the carpeting. The Depreciation Report for this property shows some assets as Sold (S in Code column), but others are still active. You may wish to revisit your sale entries to include all assets, assuming you sold the property and are no longer using it as a rental.

[kries6]

PatriciaV,

I've reviewed your lengthy analysis of my diagnostic tax file and made the needed corrections to the Residential property Asset Wks, as well as the other Asset Worksheets for that property's furnishings and appliances, etc.  I just wanted to write back to you to let you know how much I appreciate your expert assistance.  Thank you so very, very much for your timely responses to my numerous emails.  You're simply the best!  Thank you!

kries6