We are in the post season and my brain is only partially functioning. I am confusing myself on the reporting the sale of a client’s rental property. Client owned the property since 2011, but only rented it several years when he lived and workedoutside the country. He sold it in 2022.
Property was originally purchased for about $435,000 and sold for just under $600,000. The depreciation schedule was based on the estimated value of the house alone of $344,000. Over the rental life of this property, a total of $40,000 indepreciation was allowable and claimed. It is my understanding that since the depreciation was computed as straight-line, the recapture provisions do not apply to this sale. I assume, however, that the $40,000 depreciation will still serve to reduce
Assuming the above is accurate, I am reading conflicting instructions about reporting this sale. Without recapture, a simple reporting on Form 8949, transferred onto Schedule D as a capital gain seems to work accurately. But other instructions pointto a more complex combination of Forms 4797 and Schedule D. (This individual’s capital gain tax rate is 15%; I could probably compute this portion of his tax return with pencil and paper.)
I should know this. Thanks for any help in facing me forward.
Michael Bratt
AFSP Arlington, VA
On 4/25/2023 4:53 PM, Michael Bratt wrote:outside the country. He sold it in 2022.
We are in the post season and my brain is only partially functioning. I am confusing myself on the reporting the sale of a client’s rental property. Client owned the property since 2011, but only rented it several years when he lived and worked
depreciation was allowable and claimed. It is my understanding that since the depreciation was computed as straight-line, the recapture provisions do not apply to this sale. I assume, however, that the $40,000 depreciation will still serve to reduce theProperty was originally purchased for about $435,000 and sold for just under $600,000. The depreciation schedule was based on the estimated value of the house alone of $344,000. Over the rental life of this property, a total of $40,000 in
to a more complex combination of Forms 4797 and Schedule D. (This individual’s capital gain tax rate is 15%; I could probably compute this portion of his tax return with pencil and paper.)Assuming the above is accurate, I am reading conflicting instructions about reporting this sale. Without recapture, a simple reporting on Form 8949, transferred onto Schedule D as a capital gain seems to work accurately. But other instructions point
I should know this. Thanks for any help in facing me forward.
Michael Bratt
AFSP Arlington, VA
Seeing no takers yet, I will add my one cent (not the whole two cents
worth).
Who is the client? Sounds like an individual taxpayer.
Was this Trade or Business Property? If so, Form 4797. If not, Form 8949.
I think that, generally, an individual owning rental property is not in
a Trade or Business.
Seriously, this is only once cent worth.
--
On Saturday, April 29, 2023 at 2:00:17 PM UTC-7, Taxed and Spent wrote:outside the country. He sold it in 2022.
On 4/25/2023 4:53 PM, Michael Bratt wrote:
We are in the post season and my brain is only partially functioning. I am confusing myself on the reporting the sale of a client’s rental property. Client owned the property since 2011, but only rented it several years when he lived and worked
depreciation was allowable and claimed. It is my understanding that since the depreciation was computed as straight-line, the recapture provisions do not apply to this sale. I assume, however, that the $40,000 depreciation will still serve to reduce the
Property was originally purchased for about $435,000 and sold for just under $600,000. The depreciation schedule was based on the estimated value of the house alone of $344,000. Over the rental life of this property, a total of $40,000 in
to a more complex combination of Forms 4797 and Schedule D. (This individual’s capital gain tax rate is 15%; I could probably compute this portion of his tax return with pencil and paper.)
Assuming the above is accurate, I am reading conflicting instructions about reporting this sale. Without recapture, a simple reporting on Form 8949, transferred onto Schedule D as a capital gain seems to work accurately. But other instructions point
Rental property is considered business property by the IRS. As such, the sale gets reported on Form 4797.Seeing no takers yet, I will add my one cent (not the whole two cents
I should know this. Thanks for any help in facing me forward.
Michael Bratt
AFSP Arlington, VA
worth).
Who is the client? Sounds like an individual taxpayer.
Was this Trade or Business Property? If so, Form 4797. If not, Form 8949.
I think that, generally, an individual owning rental property is not in
a Trade or Business.
Seriously, this is only once cent worth.
--
On 4/30/2023 3:51 PM, Alan wrote:outside the country. He sold it in 2022.
On Saturday, April 29, 2023 at 2:00:17 PM UTC-7, Taxed and Spent wrote:
On 4/25/2023 4:53 PM, Michael Bratt wrote:
We are in the post season and my brain is only partially functioning. I am confusing myself on the reporting the sale of a client’s rental property. Client owned the property since 2011, but only rented it several years when he lived and worked
depreciation was allowable and claimed. It is my understanding that since the depreciation was computed as straight-line, the recapture provisions do not apply to this sale. I assume, however, that the $40,000 depreciation will still serve to reduce the
Property was originally purchased for about $435,000 and sold for just under $600,000. The depreciation schedule was based on the estimated value of the house alone of $344,000. Over the rental life of this property, a total of $40,000 in
point to a more complex combination of Forms 4797 and Schedule D. (This individual’s capital gain tax rate is 15%; I could probably compute this portion of his tax return with pencil and paper.)
Assuming the above is accurate, I am reading conflicting instructions about reporting this sale. Without recapture, a simple reporting on Form 8949, transferred onto Schedule D as a capital gain seems to work accurately. But other instructions
https://www.irs.gov/faqs/sale-or-trade-of-business-depreciation-rentalsRental property is considered business property by the IRS. As such, the sale gets reported on Form 4797.Seeing no takers yet, I will add my one cent (not the whole two cents
I should know this. Thanks for any help in facing me forward.
Michael Bratt
AFSP Arlington, VA
worth).
Who is the client? Sounds like an individual taxpayer.
Was this Trade or Business Property? If so, Form 4797. If not, Form 8949. >>
I think that, generally, an individual owning rental property is not in
a Trade or Business.
Seriously, this is only once cent worth.
--
I don't doubt you, but where might one find that tid bit in the IRS documentation?
--
On Tuesday, May 2, 2023 at 8:12:45 AM UTC-7, Taxed and Spent wrote:outside the country. He sold it in 2022.
On 4/30/2023 3:51 PM, Alan wrote:
On Saturday, April 29, 2023 at 2:00:17 PM UTC-7, Taxed and Spent wrote: >>>> On 4/25/2023 4:53 PM, Michael Bratt wrote:
We are in the post season and my brain is only partially functioning. I am confusing myself on the reporting the sale of a client’s rental property. Client owned the property since 2011, but only rented it several years when he lived and worked
depreciation was allowable and claimed. It is my understanding that since the depreciation was computed as straight-line, the recapture provisions do not apply to this sale. I assume, however, that the $40,000 depreciation will still serve to reduce the
Property was originally purchased for about $435,000 and sold for just under $600,000. The depreciation schedule was based on the estimated value of the house alone of $344,000. Over the rental life of this property, a total of $40,000 in
point to a more complex combination of Forms 4797 and Schedule D. (This individual’s capital gain tax rate is 15%; I could probably compute this portion of his tax return with pencil and paper.)
Assuming the above is accurate, I am reading conflicting instructions about reporting this sale. Without recapture, a simple reporting on Form 8949, transferred onto Schedule D as a capital gain seems to work accurately. But other instructions
https://www.irs.gov/faqs/sale-or-trade-of-business-depreciation-rentalsI don't doubt you, but where might one find that tid bit in the IRSRental property is considered business property by the IRS. As such, the sale gets reported on Form 4797.Seeing no takers yet, I will add my one cent (not the whole two cents
I should know this. Thanks for any help in facing me forward.
Michael Bratt
AFSP Arlington, VA
worth).
Who is the client? Sounds like an individual taxpayer.
Was this Trade or Business Property? If so, Form 4797. If not, Form 8949. >>>>
I think that, generally, an individual owning rental property is not in >>>> a Trade or Business.
Seriously, this is only once cent worth.
--
documentation?
--
| Sysop: | Keyop |
|---|---|
| Location: | Huddersfield, West Yorkshire, UK |
| Users: | 422 |
| Nodes: | 16 (3 / 13) |
| Uptime: | 196:21:06 |
| Calls: | 8,951 |
| Calls today: | 2 |
| Files: | 13,352 |
| Messages: | 5,992,474 |