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lz2end
New Member

We sold a furnished vacation home that we rented for the first 3 yrs then own use for 11 yrs. How do I report sale of furniture bought after rental not depreciated?.

Also, the 1099-S proceeds covers all elements of sale--building, land, furnishings.  Some furnishings were used during rental and depreciated.  Some were bought later just for personal use.  Am I correct that they are reported (where?) as separate sales?  And do I allocate part of the proceeds to each so in the end, the proceeds add up to the amount in block 2 of 1099-S?  I'm having a hard time determining where in TT I enter these sales.  The step-by-step seems to send me in circles.  I finally tried the fillable 4797 for building and depreciated furnishings, but don't see where to go with the other elements of this sale.  I have searched and searched TT help and community.  Every example converts TO rental, not the reverse.  I've used TT for like 25 years (Is that posible?) and NEVER had so many questions and problems.  PLEASE HELP!
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view2
New Member

We sold a furnished vacation home that we rented for the first 3 yrs then own use for 11 yrs. How do I report sale of furniture bought after rental not depreciated?.

1099-S Box 2. Gross Proceeds

Enter the gross proceeds from the sale or exchange of real estate. 

Try this with pen and paper.

The formula for calculating your cost basis on rental property is as follows:

* Purchase price

* + Purchase costs (title & escrow fees, real estate agent commissions, etc.)

* + Improvements (replacing the roof, new furnace, etc.)

* + Selling costs (title & escrow fees, real estate agent commissions, etc.)

* - Accumulated depreciation (as reported on your tax forms) [Deprecation taken on building 3  years as a rental]

* = Cost Basis

And then calculating your profit or loss would be:

* Selling price

* - Cost Basis

* = Gain or Loss

Generally ,the real estate contract has provisions specific to real estate transactions and specifies that items affixed to the property (e.g. plumbing, curtain rods, garage doors, etc.) are included (unless specifically excluded) and items not affixed to the property (e.g. floor lamps, drapes, vehicles) are excluded (unless specifically included).

The furnishings are usually transfer by a separate bill of sale.Without a separate contract there is  nothing to separate out.

Real estate ownership is conveyed by deed and that personal property ownership is conveyed by Bill of Sale. 

Lenders will not allow the value of personal property to be included in mortgage financing; only the value of the real estate.

The 25% depreciation recapture tax rate only applies to the portion of the gain attributable to real property.

To recapture the depreciation take on the 3 years as a rental you need to sell under business property sales to recapture the depreciation.

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