Insurance gain From hurricane Ian relating to rental fixed assets not replaced

[ladylake]

I do not know how to report this via TurboTax.  I received the proceeds in 2023.  I have about 10 assets that I am not replacing.  They are more than 1 year old so the gain should be LT capital gain.  The IRS says I have to report it on Form 4684 and Schedule D.  Form 4684 in TT allows entry only as Property A,B,C & D.  I cannot find any input for the individual assets.  Also the Hurricane occurred in 2022 and TT only wants be to use 2023 as a date.   Do I prepare Schedule D first?  How will it know to flow to Form 4684 or vice versa.  I cannot figure out how to enter this in TT.   I could report it on the miscellaneous line but then I would not get the benefit of the LT gain.  Please help as I am running out of time for filing and don't want to file an amended return.

[tagteam]

These items (assets) were used in conjunction with a rental property?

That would make them business assets, effectively, and should not be reported on Form 4684.

[tagteam]

Further, were the items being depreciated or expensed as rental assets?

[ladylake]

Form 4684 on page 2 Section B its for business and income property so I thought I had to use that form also.

When I purchased the assets I elected to write them all off so their basis was 0.  Do I only use Form 4797 to report the gain.  I've forgotten if that allows for me to get the benefit of LT gain.

[tagteam]

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@ladylake wrote:

When I purchased the assets I elected to write them all off so their basis was 0.

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You have nothing to report in that event since this was business property and it was discarded, although you should have reported that the assets were disposed of in that tax year. 

Effectively, you sold assets that had a $0 basis for $0. There is no gain or loss as a result.

[ladylake]

Originally I was planning on replacing them since I received insurance to replace them.  One of the assets which I received insurance proceeds ended up being replaced by the manufacturer this month since there was a pending repair request for it at the time of the hurricane and I am still not able to dispose of it or receive the new asset due to lack of an elevator.  Do I have to report gain on that item?

[tagteam]

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@ladylake wrote:

Do I have to report gain on that item?

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Yes, if you did not replace the assets and received insurance proceeds.

[ladylake]

Okay.  That's what I thought.  According to Pub 547 page 27 I still have to use Form 4684 and Form 4797. So how do I enter the info on 4684 since Section B seems to be real estate not individual assets.  The gain is not from the real estate but the individual assets.   Does the information from the Form 4797 then flow to the Form 4684 or do I just ignore that form if there's no way to input the data in TT.  I already reported the loss of the real estate value and the associated insurance proceeds which I received in 2022 since that was when the hurricane happened.  The insurance proceeds I received for the fixed assets did not happen until 2023.

[tagteam]

Ignore it because you need Form 4797 to report the sale of business property to the extent of your insurance recovery (which you did not use to replace the assets that were previously expensed).

[ladylake]

That's what I thought but I can't figure out how to get to a Form 4797 screen because the assets were never entered into the depreciation section of the software since I wrote them off.  When I search for forms in the "Open Forms" I get a form that I cannot add data to.  How do I get to an input screen to enter the data?  What are the steps I need to use?

[tagteam]

You should be able to get there by clicking the Start or Update button to the right of Sale of Business Property.

[ladylake]

It's a Schedule E rental property.  If I go to "Open Forms" Since it's I am reporting this on an individual return and I search for Sale of Business Property nothing shows up. Does this mean that there is no way to create a Form 4797 for an individual return?  I am using a Mac desktop version.  Is that not able to allow me to get to a Form 4797 input sheet?

[tagteam]

You might have to call Support. I am not familiar with the Mac versions.

Which one are you using? Premier? Home & Business? 

There should be some sort of section that has a Sale of Business Property. 

[ladylake]

I'm using versison Home & Business

I may have found a way around to get everything working.  If not I will contact TurboTax technical help .

I appreciate the time you have spent trying to answer my questions.