reporting disposition of rental property that was gifted mid-year

Forum|Forum|5 years ago
December 30, 2020
9 replies
63 views

I have clients who gifted a rental property to their daughter mid-year. I will be filing a Form 709 to report the gift, but I am unsure how to enter the disposition properly in ProSeries to make sure the capital gains and depreciation recapture do not flow to the tax return.

ProSeries Professional

This topic has been closed for replies.

Best answer by Just-Lisa-Now-

On the asset entry worksheets, in the disposal section, just enter the date it was disposed (gifted), with no sales price, that will remove it from the return as of that date with no "sale".

Just-Lisa-Now-

Answer

Intuit Community Champion

On the asset entry worksheets, in the disposal section, just enter the date it was disposed (gifted), with no sales price, that will remove it from the return as of that date with no "sale".

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

D

DJRogers

Level 2

That works but I do not see that it is triggering the passive losses carried forward to be recognized. Shouldn't they be allowed since this is a complete disposition of the activity?

Just-Lisa-Now-

Intuit Community Champion

Sch E worksheet, Box H up near the top should free up suspended losses.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

George4Tacks

Level 15

@Randy Haynes Give your client a printout of the final depreciation with YTD depreciation for the year of gift. The daughter will need that to set up the rental on her return, or for future reference when she sells.

Answers are easy. Questions are hard!

R

Randy HaynesAuthor

Level 4

Thank you. One of my pet peeves is new clients with rental properties whose previous preparers did not provide the taxpayer with complete depreciation details. I always provide that along with an explanation of the importance it carries upon disposition of the property.

Sign up

Login with SSO

Let's get you signed in

Login with SSO