Rental Building Sold- Report Where?

[zeros]

Home was converted to rental home and now sold. Where is the sale reported? Also when it was converted, do you report the actual cost or fmv when depreciation is set up? Just curious

[Kram BergGold]

You need to proviide more info

Date purchased
Date they move out
Date sold

cost plus improvements

FMV when converted to rental

Net sales price

[TAX4US]

Believe it or not. I had one where we had to go find the old 2119 because they had rolled gain into new one.

[Gary2]

To answer the questions:

1. The sale is reported on form 4797.

2. The depreciation would be set up as the lesser of (then current) adjusted basis or FMV as of the date of conversion. The basis for the sale is more complicated, and not necessarily the same as the basis used for depreciation.

[Steve Stang]

And don't forget to take out the land value when determining basis.

If you're using Drake Software, you can dispose of the asset through the data entry screen for depreciation (4562) or on the 4797. One or the either. I prefer the 4797 since you can more properly list the cost basis, depreciation to recover and expenses related to the sale.

[ttbtaxes]

It sounds, from the OP, that depreciation was may not have been taken or incorrectly taken. That can be corrected by filing a Form 3115 if the numbers are large enough to warrant it. We'll need the information requested but when the conversion was made from residence to rental, the amount to be depreciated should have been the lower of cost or FMV (less the land).