The cost of the rental property was underestimated by the client (provided a lower price). Now he sold the rental property and he sent information from the time of the purchase that the price was higher.
How can I access the prior year federal asset entry worksheet?
If it is not possible, how can I fix the error? It is showing a significant gain...
Best Answer Click here
Is the lower price just to buildings and improvements? Land would be tracked separately.
And it is rare (and ill advised) to hold real estate property in an S Corp. Are you certain the S Corp is/was the deeded owner?
What software are you using?
Just enter the correct Basis.
Is the lower price just to buildings and improvements? Land would be tracked separately.
And it is rare (and ill advised) to hold real estate property in an S Corp. Are you certain the S Corp is/was the deeded owner?
Proseries Professional
The property was in he corporation name.
The lower price was the amount paid on cash. Her uncle loan the rest of the amount to her.
Yes, the deed of the property is in the corporation's name.
it is rare (and ill advised) to hold real estate property in an S Corp.... please let me know why is rare and ill advised to hold real estate property in an S Corp.
She misunderstood Cost Basis, and reported only cash paid, and not total purchase (even if some is a mortgage). That's a tough lesson to learn.
For an S Corp, there is a Reasonable Wage (payroll) requirement. That would be one functional reason real estate ownership would not be held by an S Corp. Did you really want to turn rental income into Payroll? Another is how the S Corp entity structure is "owned" by the shareholders. The people don't own the property, so there is no provision for death of a shareholder for step up of basis or some of the tax deferred strategies (most times, any movement of that property will trigger capital gains tax).
For holding the property, there obviously needs to be operations taken into consideration. An S Corp might be operating as a building contractor who also does flips. Or, an S Corp is the property management firm for the Real Estate held by an LLC.
You can google it.
You have clicked a link to a site outside of the Intuit Accountants Community. By clicking "Continue", you will leave the community and be taken to that site instead.