Previous preparer decided to split a commercial building and rental unit (all one building - half is an apartment reported on Schedule E and other half is a retail store reported on Schedule C) for purposes of depreciation and income/expenses on two different returns. He did this because the two owners claimed to run the business together............don't ask me about why the heck he did what he did as I have no clue and would not want to go down that road. I am doing both returns so maybe that will help with the resolve.
For the fix: The so-called partnership dissolved. One owner now has the entire building and financed in his name only. I closed out the leaving partners depreciated assets by disposition on form 4797 for both the commercial building and rental and any other items he depreciated to account for any gains based on assumed values (it was close because they only did this for tax years 2008 and 2009 when they started the business together).
First, did I do that correctly on that persons returns?
Second, if I did it correctly, do I just depreciate the new equipment (as half the equipment really) supposedly sold to the other partner now running the business alone? Then continue his 1/2 of the depreciation on his regular return?
He'll basically have two sets of depreciation for the same single item.
Thanks for any help or suggestions.
For the fix: The so-called partnership dissolved. One owner now has the entire building and financed in his name only. I closed out the leaving partners depreciated assets by disposition on form 4797 for both the commercial building and rental and any other items he depreciated to account for any gains based on assumed values (it was close because they only did this for tax years 2008 and 2009 when they started the business together).
First, did I do that correctly on that persons returns?
Second, if I did it correctly, do I just depreciate the new equipment (as half the equipment really) supposedly sold to the other partner now running the business alone? Then continue his 1/2 of the depreciation on his regular return?
He'll basically have two sets of depreciation for the same single item.
Thanks for any help or suggestions.
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