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Level 3
December 7, 2019
Solved

How do you report the sale of commercial property where 1 unit of 3 was sold, and the remaining 2 were retained?

  • December 7, 2019
  • 2 replies
  • 7 views
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Best answer by TaxMonkey

Gross proceeds less 1/3 of the basis, assuming all of the units are substantially equal.

2 replies

TaxMonkeyAnswer
Level 7
December 7, 2019

Gross proceeds less 1/3 of the basis, assuming all of the units are substantially equal.

Level 15
December 7, 2019

Assuming all three units are the same ...

  1. Create a new asset using the original "placed in service" date with 1/3 of the Basis and 1/3 of the Prior Depreciation.
  2. Create a new asset using the original "placed in service" date with 2/3 of the Basis and 2/3 of the Prior Depreciation.
  3. Delete old asset.
  4. Enter sales information in the new asset that has the 1/3 of the Basis and Prior Depreciation.