Depreciation Recapture On a 100% Rental Property

Forum|Forum|6 years ago
May 24, 2020
2 replies
1 view

I purchased my rental property on 11/01/2010 for $97,000 and entered this information in the Asset Entry Worksheet on 02/10/2011 when I began depreciating the property 27.5 years. I sold the rental property on 06/10/2019 for $145,000. I had $23,000 in improvements and cost to purchase and sell the house were $7000. When filing my taxes this year do I change the Cost Basis in the Asset Entry worksheet to $127,000 so the correct amount of taxes are deducted?

ProSeries Basic

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Best answer by Just-Lisa-Now-

As long as I deduct the total depreciation amount from the Cost Basis then I should be able to add the improvements, purchase/sales fees, commissions on the sale?

Improvements SHOULD have been added as assets (and added to basis) in the year they occurred and depreciated, taking a small amount of their worth each year, then when you sell, the improvements would already be included in basis, and the accumulated depreciation that had already been deducted would be recaptured.

Since you didnt do that, you got the full amount of deduction for them already and you would NOT add them back to basis (reduce the sale price) now.

M

mdtao31

Level 6

did you report the improvments every year until sale? if you did basis is original purchase price plus

deprcation used

Just-Lisa-Now-

Intuit Community Champion

Your improvements should have been included as assets and depreciated over the years as well....or did you just expense those in the year you did them?

Can you confirm that you are using ProSeries Basic?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

B

borinquenfsAuthor

Level 3

I just expense them. Did not depreciate the improvements.

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