My client has owned rental property with a partner for years. The property is in her name so the 1099S comes in her name. I have always entered all income and expenses on schedule E as 100% and then select under Other information: 50% ownership, which halves the profits or losses.
when I go to dispose of the property and enter the gross sales price (at 100%), the software gives me half of the basis, which results in a huge gain. If I uncheck the 50% ownership then I get the full basis and the gain comes out right. But then of course the schedule E shows the whole profit/loss instead of 50%.
I would like to keep the schedule E as is: report 100% of income and expenses and let the software halve the profit/loss, but on Form 4797 I would like to show the whole sales price and have the software show the whole basis.
Is there something I am not checking, or some override that I have to use to achieve that?
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Do Schedule E as you normally would. Indicate a total disposition. Show each asset sold as of the date of sale, but DO NOT show a sales price. This should take care of properly reporting the passive loss and clear any PAL carryover.
Using the depreciation Schedule create the 4797 through the Schedule D input, reporting 50% of the sale price. Show the other 50% of sale as an code N or O on the 8949. Alternatively show 100% sales price on 4797 and adjust basis to make the gain the appropriate 50%. Either way I would attach statement explain the situation and indicate the name and SSN of the other "partner".
I imagine some other user might have even better suggestions to report this nonconforming partnership sale
Do Schedule E as you normally would. Indicate a total disposition. Show each asset sold as of the date of sale, but DO NOT show a sales price. This should take care of properly reporting the passive loss and clear any PAL carryover.
Using the depreciation Schedule create the 4797 through the Schedule D input, reporting 50% of the sale price. Show the other 50% of sale as an code N or O on the 8949. Alternatively show 100% sales price on 4797 and adjust basis to make the gain the appropriate 50%. Either way I would attach statement explain the situation and indicate the name and SSN of the other "partner".
I imagine some other user might have even better suggestions to report this nonconforming partnership sale
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