proper way to complete form 4797

[lovesledz]

When reporting the sale of a rental property that has had many capital improvements over the years, is everything reported as one sale or is the building and each improvement listed as a separate sale? I believe it to be the latter but I haven't done one of these for quite some time and just want to be sure.

[Traveling EA]

Group sale

Most software allow you to do a group sale for this type of sale. All of the assets are combined for the sale. See the instructions for 4797 since the land gets reported differently than the rest of the assets.

[mactoolsix]

Since "fixtures & improvements" are seldom listed as a separate sale on the settlement statement, we usually do two "bulk sales." The first for the building, land and all major improvements (27.5 or 39 year life). These are sold for the sale price (less expenses). The second bulk sale is for all other fixtures & improvements - sale price zero.

[Bees Knees]

TTB, page 6-13 has an example of a residential rental sale on Form 4797. The example shows the rental activity being split into three assets (1) for land sold for a gain reported in part 1 of the 4797, (2) for furnishings sold at a loss reported in part 1 of the 4797, and (3) for the building sold at a gain reported in part 3 of the 4797.