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curt504
Level 3

TT-Business 2020, sold a rental that I added a depreciated item of roof, After clicking sold house, the roof is still showing???

I'm finding that there needs to be more help when adding capitalizable items within a "property" that is hooked to that property so that whn you sell the property all of its sub pieces of capitalized improvements also get handled at the same time...

 

Perhaps I mis entered the capitalizable items way back.  What I have now is;

 

- House A was sold.  I click through that work flow.

- I come back to the "Disposed Assets" list and the roof and/or AC is still showing.   When I click Edit for the roof, sold, there is no logical choice to have the roof costs, depreciation to be properly handled within the sale of the house??

Help??  Tnx a bunch.

1 Best answer

Accepted Solutions
curt504
Level 3

TT-Business 2020, sold a rental that I added a depreciated item of roof, After clicking sold house, the roof is still showing???

No this is the roof.  That I added some years back and little proper help from TT business if I miss entered it.  

Its a capitalized asset that needs to be included in the calc of the whole numbers for the sale.

How do I fix this situation?   

- An apparently separate asset listed in TT business real estate per an address that is actually integral to the house (roof) and needs to be included in the sale?

 

tnx 

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5 Replies
ColeenD3
Expert Alumni

TT-Business 2020, sold a rental that I added a depreciated item of roof, After clicking sold house, the roof is still showing???

If you have assets apart from the building, you will have to go through the steps of the sale for each of them. Since the sales price was part of the house, you can put zero for sales price.

curt504
Level 3

TT-Business 2020, sold a rental that I added a depreciated item of roof, After clicking sold house, the roof is still showing???

No this is the roof.  That I added some years back and little proper help from TT business if I miss entered it.  

Its a capitalized asset that needs to be included in the calc of the whole numbers for the sale.

How do I fix this situation?   

- An apparently separate asset listed in TT business real estate per an address that is actually integral to the house (roof) and needs to be included in the sale?

 

tnx 

Carl
Level 15

TT-Business 2020, sold a rental that I added a depreciated item of roof, After clicking sold house, the roof is still showing???

Since the sales price was part of the house, you can put zero for sales price.

Actually, with TTX you can't do that with depreciable assets.  If you do, then you show a gain on the sale of the property/structure after depreciation recapture, and a loss on the sale of the roof after depreciation recapture. TTX can't and still doesn't deal with that correctly mathematically, and will not generate an error on the final review. Basically, the 4797 will be wrong. Confirmed on TTX 2019 and prior. Not yet confirmed on TTX 2020.

 

curt504
Level 3

TT-Business 2020, sold a rental that I added a depreciated item of roof, After clicking sold house, the roof is still showing???

What is my best path forward with these RE sales with me trying to do the right thing by capitalizing improvements?

I have 2 sales in 2020 (installment) that have new capitalized roofs...  ;(   

Whats so hard here?

Carl
Level 15

TT-Business 2020, sold a rental that I added a depreciated item of roof, After clicking sold house, the roof is still showing???

You're right, there's nothing hard about this at all. For most, it's just not very intuitive. But once you "get it", then you've "got it". This is the guidance I provide, so as to ensure the program does the math correctly.

If you're doing an installment sale you'll need to adjust the guidance accordingly. There's just to many variables for an installment sale, one can't possibly cover them all in a single post and still keep it simple.

Reporting the Sale of Rental Property

If you qualify for the "lived in 2 of last 5 years" capital gains exclusion, then when prompted you WILL indicate that this sale DOES INCLUDE the sale of your main home. For AD MIL personnel who don't qualify because of PCS orders, select this option anyway, because you "MIGHT" qualify for at last a partial exclusion.

Start working through Rental & Royalty Income (SCH E) "AS IF" you did not sell the property. One of the screens near the start will have a selection on it for "I sold or otherwise disposed of this property in  2019". Select it. After you select the "I sold or otherwise disposed of this property in 2019" you continue working it through "as if" you still own it. When you come to the summary screen you will enter all of your rental income and expenses, even it it's zero. Then you MUST work through the "Sale of Assets/Depreciation" section. You must work through each individual asset one at a time to report its disposition (in your case, all your rental assets were sold).

Understand that if more than the property itself is listed in your assets list, then you need to allocate your sales price across all of your assets.  You will only allocate the structure sales price; you will NOT allocate the land sales price, since the land is not a depreciable asset.  Then if you sold this rental at a gain, you must show a gain on all assets, even if that gain is $1. Likewise, if you sold at a loss then you must show a loss on all assets, even if that loss is $1

Basically, when working through an asset you select the option for "I stopped using this asset in 2019" and go from there. Note that you MUST do this for EACH AND EVERY asset listed.

When you finish working through everything listed in the assets section, if you ever at any time you owned this rental you claimed vehicle expenses, then you must also work through the vehicle section and show the disposition of the vehicle. Most likely, your vehicle disposition will be "removed for personal use", as I seriously doubt you sold your vehicle as a part of this rental sale.

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