Donation of Rental Property

[jasieve]

I have a client who who donated property which was formerly a rental.  He has owned it for over 30 years, so the property is fully depreciated.  The original basis was $27,100 for depreciation purposes.  The adjusted basis is $7900.  The FMV is $105,000.  We have the appraisal to show value.  How does this get  reported on Schedule A?  I know the deduction will be limited due to his income.  Is he entitled to FMV and/or do I need to recapture the depreciation as ordinary income?

[sjrcpa]

Form 8283. Most likely he can deduct FMV. See the form instructions.

[The Tax Shelter]

I have a similar situation.  Fully depreciated rental property purchased in 1972 was donated.  Purchase price of asset was $30,992.  Hud-1 to recipient shows "gift" of $43,959 + expenses.

1. I am assuming the gift is $43,959 ?

2. Is there any gain on the disposition?

[sjrcpa]

Was the donee a charity? I've never seen a HUD 1 for a gift of property to a charity. 

The charitable contribution is the FMV determined by the required appraisal.

No taxable gain on a contribution of appreciated property.

Or was this a bargain sale to charity? More complicated.

[The Tax Shelter]

Yes, it was given to a 501(c)(3).  I agree about the Hud-1.  It wasn't a sale, just a transfer.  & I'm not sure how they arrived at the value.  It wasn't the selling price or the appraised price.

[sjrcpa]

What selling price? You said it wasn't sold to the charity.

[The Tax Shelter]

It was given to the charity and they sold it for $35,000 +/-

[sjrcpa]

Oh. Makes sense now.