When a rental home is sold and you have been depreciating not only the house but a new roof and fence that were replaced at a later date and other items such as a new air conditioner etc, how do you determine the sale price of these other items. The only thing I know is the total sale price of the house (and land).
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If you mark the items as being sold as a group Drake will allocates the sales price and carry to the proper area of the 4797. Otherwise I would allocate based on cost or any other method that didn't distort the income.In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
Alexis de Tocqueville -
2 Ways
Most of our software has a place to mark that it is a part of a total sale. Put in the sale number and the total sale and identify all the assets in that sale.
The other way is to add up the total of original basis of the assets and then divide the origianal basis of each asset by their percentage of the total basis. Do not include land in the total for either computation as it is not depreciable. Or I guess if you include the cost of the land in the total basis and the total sale the profit on the land will work out, but we always try to seperate the land before and after because of the different rules.AJ, EAComment
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