Sale of Residential Property related appliances and improvements

[swongtax]

Hello All,

My question concerns sale of a Rental.

How do I indicate the disposition of rental related appliances and Improvements that have been depreciating as separate assets (separate from the Residential Property)?

I entered the disposition date under DISPOSITIONS on the Asset entry worksheet (through Schedule E), but the asset cost and accumulated depreciation amounts do not get added to the Real property numbers on Form 4797.  I have always had this problem, but I am forgetting how to go around this.  I remember calling Proseries years before and they told me that the program does not lump all assets together even though all are part of a single sale.

I recall that I manually adjusted the amounts for total Cost and Accumulated Depreciation on Form 4797.

Any help is appreciated!

Sui

[TaxGuyBill]

You are supposed to allocate the sales price between the assets based on the Fair Market Value of each item.  For example, let's say everything sold for $200,000.  You might report the sale of the house as $198,000, and then divide the other $2000 between the appliances.

Remarkably, whenever I do it, the Fair Market Market Value of all of the appliances is the exact amount of the remaining Basis, resulting in $0 gain/loss for all of the appliances and only the home has a gain/loss.   😂

[IRonMaN]

Or you use the CAGMC approach and add all of the asset costs and accumulated depreciation and then enter the total as one asset and then delete the other assets.  How much is a 10 year old washer and dryer really worth?

[swongtax]

Yes, I think that is exactly what I did last time.

But it is a lot more work when there is a long list of assets.

[Just-Lisa-Now-]

then go with the Come And Get Me Coppers approach method below LOL

[swongtax]

Yes, I think I did this with a new first year client whos old a property a few years ago.

With ongoing clients, it is more work to do on Proseries.

I learned from a friend that Drake automatically lumps together all assets. But Proseries does not do that.

Sui

[TaxGuyBill]

Yes, I think most professional software has the ability to do "group" sales.   ProSeries is severely lacking  in that regard.

[rbynaker]

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@TaxGuyBill wrote:

Remarkably, whenever I do it, the Fair Market Market Value of all of the appliances is the exact amount of the remaining Basis, resulting in $0 gain/loss for all of the appliances and only the home has a gain/loss.   😂

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Hey, me too!  It's amazing just how accurate those IRS depreciation tables are for determining FMV! 🤔