Figuring adjusted basis for a rental property owned 9 years

[labs]

property was used as a like kind exchange

[MichaelL1]

Your adjusted basis in the rental should all be listed on the rental schedule.

It would be the land, building, and value of any other assets that are still being depreciated.  

You did not say how you first acquired the rental, but I am going to assume you bought it.

Then it would be the cost of the rental building less the depreciation taken over the years.

So say you paid $120K, 9 years ago.  The closing costs were $2K, and some improvements were made 4 years ago that costs $25K.

Your entire costs would then be $147K (120+2+25) then minus the depreciation taken over the last 9 years, so say that is $23K so your adjusted basis in my example is $124K.  

If you look at detailed depreciation schedule do not overlook the land, as it may (or may not) be listed there.  The land is part of the adjusted basis also and has no depreciation on it. 

[okrandy]

So does TTax Premier add in the depreciation not taken to increase the basis as shown in your example above?   I know the costs of all improvements and the depreciation that has been taken.  Since we only owned the property for a little over 11 years, not all improvements have been fully depreciated.  The amount not depreciated should go to adjust (increase) the basis of the property thus reducing the capital gain.  Does TTax do this?  If not, how do I do it?  Where do I go in TTax to verify that it has been done correctly?
Thank you.

[MichaelL1]

When you sell a property you need to allocate the sales price to all the asset listed on the depreciation schedule plus the land. Best to do this first outside of TurboTax and then do the entries inside the program.  So for example if I sell a rental for $120K, I may allocate $85K to building, $15K to land, the remaining $20K to other items on the depreciation schedule.

[MichaelL1]

Then TurboTax will compute the gain or loss.  This is determined by the allocated sales price less the adjusted basis (cost less depreciation taken).   Okrandy, let me know if you still have questions, so I can fully answer what you are asking.

[okrandy]

Ok. This will result in all of the improvements being listed on Form 4797 which will then result in the basis being adjusted?

Thank you!

[MichaelL1]

That is correct, just take your time, and the program will do this for you.