Selling Rental Property - How to handle Depreciation of appliances and furniture

[davedaps]

Hi,

I purchased my rental in May 2015 and sold it in may 2018.

Sale price was 257k for the building and 13k for the land. I claimed 21k for the property depreciation.

I'm confused what to do with the other depreciated items like renovations (inc kitchens) appliances and furniture. Some I left, some I kept as personal items and some I sold. How is each instance handled? They all had some depreciation taken but not all. 

I've read some answers, but if someone could reply with examples that would be awesome. e.g.

Appliances cost $2500 depreciation 1777 (left in property)

furniture cost $2500 depreciation 1378 (sold for about 40% of the original cost)

furniture cost 1000 depreciation 500 (kept this as personal property)

Many Thanks for your time to help.

Dave

[davedaps]

Anyone who can help with this?

[IsabellaG]

For the appliances that you sold with the property, you'll need to allocate a portion of the sales price to the appliances. So of the $257,000 that was for the building, some small portion of that must be allocated to the appliances. Any reasonable figure can be used. You would reduce the $257,000 by whatever amount you used as a sales price for the appliances, and the rest is for the building.

Let's say you allocate $1000 of the sales price to the appliances. Then you'd show a gain of $277 on the sale ($1000- 723 adjusted basis)

For the furniture that you sold separately, you'll report the sale date and the sales price in the Sale of Property/Depreciation section of TurboTax. The gain or loss will be computed based on that.

For the furniture that you kept,  check that the item was sold, retired, disposed of or converted to personal use in the Sale of Property/Depreciation section, but when you are asked for the sales price, leave the box blank. There is no taxable event at this time.

[Anonymous]

in theory, the sales price allocated to appliances is their FMV.   

you can search the web to get an idea of what their FMV might be.

many times the items will have a FMV less than their undepreciated cost

it is highly unlikely that they worth more than their net depreciated value.

when pros prepare  returns with similar situations  they will ask the taxpayer about this and many time the answer is the FMV is the undepreciated value. 

since you have an actual selling price for the furniture use that.