Question
Sale of Rail Car
I have a client that sold railcars originally purchased in 1981/1982. I know the original cost. I do not know how much depreciation was taken, although I'm assuming it was equal to the original cost. We have been using the Schedule E for all rental income/expenses with a Property Type of 8. When I try to add the asset on the Asset Entry Worksheet, I'm having trouble finding the correct type of asset to choose. I believe the depreciation would have been 20 years, so it's completely depreciated. However, if I choose G - General purpose tools/machinery/equip, it's picking Asset Class 5, prescribed ACRS with a recovery period of 5 years. Is this okay? My feeling is that the gain is simply the sales price less sales expenses.
