The spouse died and I need to show an adjusted basis on numerous rental properties. How do I do this and restart depreciation on the new basis?

Forum|Forum|6 years ago
December 6, 2019
2 replies
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My tax clients live in California which is a community property state. I can adjust the basis on all of their rental properties - how do I change the basis and start a new depreciation schedule based on the new basis?

ProSeries Professional

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Best answer by TaxMonkey

Dispose of the old asset on dead of death using the adjusted basis as the gross proceeds. Enter a new asset placed in service on date of death with the new basis.

T

TaxMonkeyAnswer

Level 7

Dispose of the old asset on dead of death using the adjusted basis as the gross proceeds. Enter a new asset placed in service on date of death with the new basis.

T

TaxGuyBill

Level 15

Enter the date of death as the disposition date on the Asset Entry Worksheet. Then leave the sale price BLANK. That will stop the depreciation for the 'old' Basis.

Then add a new Asset Entry Worksheet, using the date of death as the "placed in service" date and the Fair Market Value on the date of death as the Basis.

For any future readers, that process is ONLY for clients that are in a Community Property State. A non-Community Property State has a bit of a different process.