Have a Tax Question? Ask a Tax Expert
I'm not sure I understand your question.
Was the replacement property being depreciated?
What type of property are you talking about?
Rental real estate or ?
You are probably dealing with a sale that gets reported on Form 4797, but please clarify what you are asking about.
OK, well you are way ahead of the game.
You realize, I'm sure, that you can amend the last 3 years tax returns to claim the depreciation you failed to take?
The adjusted basis of the replacement property is what should have been depreciated as you probably know.
However, I would suggest at this point that in order to mitigate the impact of not claiming depreciation on the building for the ten years, that you take a somewhat aggressive approach to the allocation of the land & building of the adjusted basis of the property as of it's acquisition date.
We can discuss that further if you wish.
By the way, was there some reason why you didn't claim the depreciation on the property?
Did you depreciate the other properties?
Re: 4797 When you correct the starting basis to 646,494 & allocate the land the transaction will change to a gain & be reported on Part III?
I don't see the total of 646,494. - Is that the ending basis you are referring to?
What is the Correct beginning basis of the property sold ie. the Hotel?
So, now when you switch to Part III, do you still have a question about where the figures flow?
What depreciation report?
I thought you didn't depreciate the property?
Generally it is Section 1250 property, depreciable real property
I haven't reviewed those other sections
"not subject to net income tax"? What do you mean or is that an attempt at humor?
From 10 years ago?
That input has to come from somewhere;
I'm obviously missing something here. If that's in TurboTax, the depreciation would have been taken. So is it basing that on something you entered related to the sale?
My thought was simply a way to reduce the lost depreciation.
I don't know how you would be able to reduce the basis of the replacement properties now;
You have to be able to justify how you are doing the allocation which should have been determined at the time of the transaction and was the basis of depreciation. If you've depreciated everything except this property, you are locked in to that basis.
I don't know how you could go back and re-allocate that now; I don't think that would be acceptable and would definitely put you at risk for the tax and there would definitely be penalties & interest involved.
Please remember to rate my response as that is the only way we receive credit for our work.
Thanks for using JustAnswer.com