Can I use line 520 "Total Reduction Amount" on Hud-1 as "Cost of Property (or Tax Basis) Plus Expenses of Sale" in my sale of business property section?

[DianeW · Accepted solution]

No.  You will start with line 420 as the sales price. The sales price of the business property is the amount agreed upon by the seller and buyer.

The sale price of the business property cannot be reduced by an loan balances that may have been paid off.  The expense attributed to that loan balance is already being accounted for in the "cost of the property" at purchase, not the accumulative amounts paid to date for the business property.

The result of sales price, less selling expenses minus the adjusted cost basis equals gain or loss.

The cost of the property you sold is the amount you paid for the property, plus purchase expenses and capital improvements, less accumulated depreciation. This result is your adjusted cost basis.

The information below will also be helpful.

https://ttlc.intuit.com/replies/6452836

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