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I have a client who who donated property which was formerly a rental. He has owned it for over 30 years, so the property is fully depreciated. The original basis was $27,100 for depreciation purposes. The adjusted basis is $7900. The FMV is $105,000. We have the appraisal to show value. How does this get reported on Schedule A? I know the deduction will be limited due to his income. Is he entitled to FMV and/or do I need to recapture the depreciation as ordinary income?
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Form 8283. Most likely he can deduct FMV. See the form instructions.
The more I know the more I don’t know.
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I have a similar situation. Fully depreciated rental property purchased in 1972 was donated. Purchase price of asset was $30,992. Hud-1 to recipient shows "gift" of $43,959 + expenses.
1. I am assuming the gift is $43,959 ?
2. Is there any gain on the disposition?
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Was the donee a charity? I've never seen a HUD 1 for a gift of property to a charity.
The charitable contribution is the FMV determined by the required appraisal.
No taxable gain on a contribution of appreciated property.
Or was this a bargain sale to charity? More complicated.
The more I know the more I don’t know.
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Yes, it was given to a 501(c)(3). I agree about the Hud-1. It wasn't a sale, just a transfer. & I'm not sure how they arrived at the value. It wasn't the selling price or the appraised price.
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What selling price? You said it wasn't sold to the charity.
The more I know the more I don’t know.
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It was given to the charity and they sold it for $35,000 +/-
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Oh. Makes sense now.
The more I know the more I don’t know.
