Gain on Reposession of Real Property

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  • Bird Legs
    Senior Member
    • Jun 2005
    • 990

    #1

    Gain on Reposession of Real Property

    Please excuse me for this simple question but my mind is not in great shape. Too many doctor visits.
    Client owned a rent house. He sold it in 2005 carrying the note. Client repossessed the property in March 2006. There was a gain on repossession of $3200. The gain is added
    to basis to calculate the new basis.
    Question: how is this gain reported on the 1040? Sched. D? 4797?
    Your assistance in this is greatly appreciated.
  • solomon
    Senior Member
    • Aug 2006
    • 1012

    #2
    On the form on which the sale was originally reported.

    Comment

    • Bird Legs
      Senior Member
      • Jun 2005
      • 990

      #3
      Solomon

      Thank you very much. I am in need of all the help any one can give.

      Comment

      • Joe Btfsplk
        Senior Member
        • Dec 2005
        • 527

        #4
        Reposession

        In the 2002 tax year, I had a client who reposessed three rent houses that he had sold on an installment sales arrangement. I reported the gain on page 2 of Form 4797. I don't remember all about the research I did, but that was the way I handled it and the IRS did not question it.

        Comment

        • Bird Legs
          Senior Member
          • Jun 2005
          • 990

          #5
          Joe-Gain on Repossession

          Thank you very much for your response. Greatly appreciated.

          Comment

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