Have a client that has a rental property destroyed by a fire. Received the insurance reimbursement and made the improvements. Sold it in Sept and was still working on it. I took the expense up to the sale and added to basis of the sale. But now how do I show the loss or gain on the rental with the insurance reimbursement? Do I reduce the selling of it by the loss or gain from the casualty? Or are they reported all separate? If separate - what do i use for the basis of each? Has anyone ever done one of these that burned & sold in same year for the 4797 and the 4684. Help and thanks for your input
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Nope, never done one with a loss and sale in the same year, but I would only report the gross proceeds on the sale on the 4797, computing the basis like this:
Original Cost + prior improvements;
Less Depreciation in prev years; =
Prior Adjusted Basis.
Add Improvements in year of sale, including after fire;
Less Insurance Reimbursement,
Plus Costs of Sale, =
Net Adjusted Basis
That should work. -
Thanks
Was trying to do something like that - but got out of hand - trying to think to much sometimes.
Thanks for the pushComment
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