How do I find the Federal Adjusted Basis for the home I sold? This is required for A-3128 NJ form.
Federal forms have DIFFERENT/CONFUSING amounts on Disposition Report, Smart Worksheet, and Fed #4797 forms. It looks like Fed forms split Land/Building but I have not idea which form is correct. WHICH FORM IS CORRECT?
Use the basis from form 4797. That is your federal adjusted basis.
I am confused. Form 4797 calculates adjusted basis for the building potion only and shows the land potion as a “gain”. Am I supposed to ADD the Adjusted Basis for the Building PLUS the land portion to get the total adjusted basis?? I don’t think reporting only the building basis portion (and excluding the land portion) for NJ form would make sense.
No. The two are reported separately on the 4797 and are not combined together. The reason the building basis is adjusted is because depreciation recapture is taken into consideration to lower (adjust) your basis for the building. Land has no depreciation considerations as it does not depreciate for tax purposes. The only basis adjustments that may be considered for land are land improvements that were made while you owned the property. Both these components are listed separately in part 11 Box 10 of the 4797.
I am confused by your second question. Were the land and building sale not reported to New Jersey?
Full sale reported to NJ per TurbiTax.
— NJ claim A3128 asks for full sales price and adjusted federal basis (building + land) to calculate Net Gain.
— If I report Line 23 from #4797 that excludes the Land portion of sale that I should pay taxes on.
— For this form I believe I should do the following: Sales Price LESS Building Adjusted Basis LESS Land Portion = Net Gain.
Form 4794
– Line 10 only shows only Land while the building seems to be shown in Lines 20-23
—. Line 24 shows “gain” which matches the Land value on the SmartWorksheet from TurboTax.
AT THIS POINT IM NOT SURE TURBOTAX RECORDED THIS TRANSACTION PROPERLY AT ALL.
HOW CAN THIS BE RESOLVED WITH A PROFESSIONAL REVIEW?
I cannot find any link to start TurboTax Live or update. Is there a EASY way to do this? Links to a page are not useful when I search the whole page and it gives more links or instructions for 'floating TurboTax Live' button which is not present.
In TurboTax Online, Live Tax Advice may be found in the upper right hand corner of the screen.
You may also:
@donnel904-aol-co
None of the items/options mentioned occur or are present in the TurboTax App (desktop).
For online; I'm not sure why I would pay extra to help answer a few questions, for a product that I already purchased.
Still - it makes no sense why land is excluded for adjusted basis. I understand the building only is adjusted to obtain a final basis, but the land should be added back (with no adjustment) to obtain the final 'value' of the property.
You are correct that the house and land go together to create the basis. The NJ instructions, page 11, states: You can deduct the expenses of the sale and your basis in the property from the sales price. In general, when calculating your gain or loss, you will use the cost or adjusted basis that you used for federal purposes.
As long as your NJ taxable income is correct and properly taxed, that is the goal. Since you are using the desktop version, you can switch to FORMS mode to see the actual forms. You can right click and "data source" or learn "about" the lines.