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Stupidasur3
Level 4

Asset Disposal of Carpet in a Rental Home

I am carrying an asset for carpeting that has been removed from a rental home and would need to dispose of it on the depreciation schedule.  Do I need to answer yes to the "Special Handling Required Question"?  Does this need to be reported as a Sec 1250 property?  I find that the statement in TurboTax of "This asset was a rental, a home office, or a home office improvement within the home" to be confusing.  No, I didn't rent the asset (I owned it), but I did in essence rent it to others.  I guess this could be a little more descriptive within the program.  The "Help" associated for this item seems specifically to discuss items related to the home office deduction.  Please help clarify.  Thanks

1 Best answer

Accepted Solutions
RayW7
Expert Alumni

Asset Disposal of Carpet in a Rental Home

If you have a depreciation schedule for this item then you would not need to answer yes to the "Special Handling" question.

 

The carpet would be 1245 property.  Generally, 1245 property is known as “tangible” or “personal” property. 1245 tangible property assets are depreciated over shorter depreciable lives mandated by the Internal Revenue Service (IRS). A few examples of 1245 property are: furniture, fixtures & equipment, carpet, decorative light fixtures, electrical costs that serve telephones and data outlets.

 

1250 Property is generally described as “real property,” and it has further been defined as “all depreciable property that is not 1245 property”. When the term real property is used, it generally means the structural components of a building including the exterior walls, windows, floors, stairs, elevators, doors, roof, fire protection systems, plumbing, electrical, heating, ventilating and air conditioning systems as well as other assets in the building that are permanent in nature.

 

You need to dispose of the property by telling the software how and when it was disposed.  Follow these directions.

  • Down the left side, click Federal.
  • Click on Income & Expenses.
  • Under Your income and expenses, scroll down to
  • Rental properties and royalties, click Edit/Add.
  • Do you want to review your rental?, click Yes.
  • Under Rent and Royalty Summary, click Edit.
  • Click Update to the right of Assets/Depreciation.
  • Do you want to go directly to your asset summary?, click Yes and Continue.
  • Click Edit to the right of the assets to be disposed.
  • Go through several screens until you get to Tell Us More About This Rental Asset.
  • Click on This item was sold…….
  • And continue to answer the questions.

View solution in original post

1 Reply
RayW7
Expert Alumni

Asset Disposal of Carpet in a Rental Home

If you have a depreciation schedule for this item then you would not need to answer yes to the "Special Handling" question.

 

The carpet would be 1245 property.  Generally, 1245 property is known as “tangible” or “personal” property. 1245 tangible property assets are depreciated over shorter depreciable lives mandated by the Internal Revenue Service (IRS). A few examples of 1245 property are: furniture, fixtures & equipment, carpet, decorative light fixtures, electrical costs that serve telephones and data outlets.

 

1250 Property is generally described as “real property,” and it has further been defined as “all depreciable property that is not 1245 property”. When the term real property is used, it generally means the structural components of a building including the exterior walls, windows, floors, stairs, elevators, doors, roof, fire protection systems, plumbing, electrical, heating, ventilating and air conditioning systems as well as other assets in the building that are permanent in nature.

 

You need to dispose of the property by telling the software how and when it was disposed.  Follow these directions.

  • Down the left side, click Federal.
  • Click on Income & Expenses.
  • Under Your income and expenses, scroll down to
  • Rental properties and royalties, click Edit/Add.
  • Do you want to review your rental?, click Yes.
  • Under Rent and Royalty Summary, click Edit.
  • Click Update to the right of Assets/Depreciation.
  • Do you want to go directly to your asset summary?, click Yes and Continue.
  • Click Edit to the right of the assets to be disposed.
  • Go through several screens until you get to Tell Us More About This Rental Asset.
  • Click on This item was sold…….
  • And continue to answer the questions.

View solution in original post

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