Rental Co-owned and selling

[mag1949]

Appreciate any insight on this.

Own rental with daughter 2/3 and 1/3 tenants in common on the deed. CPA told me that one of us could report income/expenses/depreciation the Sch E and the other didn't need to so that is the agreement my daughter and I have. She is a silent partner.  So I have always reported 100% of income/exp/dep. Now the property is sold. I have to do the dep recapture 100% BUT the capital gain needs to be divided per our ownership on the deed. I can do this easily on an excel worksheet and know the amounts we are to report. EX: cost basis $100, Sold for $200.  My cost basis is $66; daughter is $34. My sales basis is $133; daughter is $67. I add back 100% of depreciation.  BUT I can't figure out how to do this on TTAX. I go to the Sch E worksheet and it lets me say I own 66% and lets me say 100% of inc and expenses are mine. BUT it doesn't use the % to apportion the cost basis or the sales basis. Instead it puts all gain on me and I can't overwrite.  I also tried to enter the 66% in the Asset worksheet and it takes the % but turns it red and doesn't use the number in calculations (basis for gain or loss if different). 

1) I can't find the IRS statement that says I was allowed to take all the income/ex so pls confirm that is true.  2) How do I make TTAX use the % for the gain and loss?

TIA

[Mike9241]

see a competent CPA who will tell you the first CPA was full of hot air when he/she told you only one needed to report the rental.  

[mag1949]

I just spoke with another CPA who said "Normally, it is prorated, but if there is a written agreement stating different % allocation, then one co-tenant owner does not need to declare."

[mag1949]

The IRS says that an investor who buys property jointly with someone else may be able to claim all of the rental income and expenses. They need to follow allocation regulations.  So I only need to know how to do this in TTAX. Above message still applies. TTAX asks for the % of ownership but doesn't use that % in calculating gain and losses. I still need to know how to do it in TTAx. 

[KristinaK]

The sale of rental property is reported on Form 4797. I suggest that you make an entry directly in Form 4797 (Forms mode in TurboTax Desktop) to reduce your gain by the amount that is applicable to your daughter. In the description use: Nominee income, TIN xx-xxxxxxx. 

Your daughter will need to enter the Sale of property (Form 4797) showing the sale price (her portion), depreciation, and basis, to arrive at the same amount as you are showing on your tax return.