Recapture path

[wafco33]

After entering the full sale of a rental property, on f4797, I cant find the recapture and flow to where it is taxed i believe at ordinary rates,  guide me pls

[Critter-3]

All you have to do is sell off the asset that is already listed in the asset section and the program will do the rest for you automatically.   So do you have the asset(s) listed for depreciation ? 

https://ttlc.intuit.com/questions/1933977-i-sold-my-rental-property-how-do-i-report-that?jump_to=ans...

[wafco33]

Yes, got my list of building, land, fully depreciated hot water heater bought long ago, and a garage door and opener that is 5 years into 15 yr property depreciation. Where is the recapture tabulated? 

[Rick19744]

Take a look at your form 4797 and follow the lines.

Recapture is determined in Part III and then carried to other parts of the return.

As an example, Section 1245 recapture on line 25b gets totaled on line 31 and is then carried to Part II line 13 and ends up getting taxed as ordinary income.

Once again, either print out your return and follow the forms or review it online.

[Critter-3]

ALL the assets listed for depreciation need to be sold so you need to allocate the sale price & costs of sale between  all of them.  You need to get a pencil and paper and make yourself a table so you have all the info needed when the program asks for it since the program  will not do the allocation  for you.

 A simple allocation example using 100,000 of assets  and a sale price of 200,000 and cost of sale of 20,000 : 

assets              original basis             % of total basis      sales price     cost of sale

house             70,000                          70%                         140,000          14,000

land                20,000                           20%                            40,000           4000

roof                10,000                           10%                             20,000           2000

 totals            100,000                         100%                         200,000         20,000

[Rick19744]

Wait.  @Critter-3 what is a pencil and paper????  Can we still buy that!!!! LOL.

[Critter-3]

LOL ... of course you can always use a slide rule if you can find one  but a calculator on your phone/computer/hand held  will do which is something all of us in grade school would have loved to have had back then... kids have it so easy these days. 

[tagteam]

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@Rick19744 wrote:

........what is a pencil and paper????  Can we still buy that!!!!

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Yes, at the Dollar Store. They cost $5 each.

[carolync]

When I entered house and land purchase price together, and the land allocation also, do I put the sale price of both % for land and house in that asset, and the % of sale price for the rest of the items separately? Turbotax didn't like me putting land on its own since it is not depreciated. Also, if an item is fully depreciated, does it still need a value from the sale? It is part of the ratio of the basis.