Asset Type and Depreciation related to residential real estate investments

Forum|Forum|5 years ago
September 21, 2020
8 replies
32 views

Hi Intuit Accountants Community!

I have a partnership that purchases residential properties which it renovates and then sells them at a profit.

Question 1: In the ProSeries Tax Software, Asset Entry Worksheet, which asset type do I choose? Would it be Residential rental real estate?

Question 2: Do I take depreciation each year before I subsequently sell the properties?

Thanks very much I appreciate any guidance you can lend.

ProSeries Professional

This topic has been closed for replies.

sjrcpa

Level 15

If they are renovated and sold there is no depreciation. This is essentially inventory.

The more I know the more I don’t know.

T

TaxGuyBill

Items held for resale are not depreciated, so you don't need to add them as an Asset.

EDIT: Susan beat me by 22 seconds.

sjrcpa

Level 15

You beat me in about that on the last one. 😀

The more I know the more I don’t know.

qbteachmt

Level 15

I thought you left it for someone else to stop in and be helpful 🙂

Don't yell at us; we're volunteers

qbteachmt

Level 15

"Would it be Residential rental real estate?"

No, because your client is not Keeping the property and Operating it. Depreciation applies to something In Service and starting to "wear out a bit" per its Use under the IRS regulations. You have neither condition here: It's not Residential Real Estate being rented.

Don't yell at us; we're volunteers

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