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The living room furniture in my rental property is no longer…

Hello Pearl Accountant's Assistant:...

Hello Pearl

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

The living room furniture in my rental property is no longer serviceable. Same is true for the washer & dryer. How do I show that on my taxes?

Accountant's Assistant: Is there anything else the Accountant should be aware of?

All are 5-1/2 years old.

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Answered in 6 minutes by:
3/19/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,730
Experience: Taxes, Immigration, Labor Relations
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If the furniture and appliances are sold - that sale transaction is reported on your tax return.

If these assets become absolute and do not have any value - these are reported as deemed sale at zero price.

The loss will be calculated based on the adjusted basis (after depreciation).

These are reported on form 4797.

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Customer reply replied 1 month ago
Definitions please - what do you mean when you say, "...assets become 'absolute'? What do you mean when you say, "...'deemed' sale at zero price."?

Deemed sale is not actual sale...

The asset becomes absolute when it is not usable and not sell-able.

Example -

- the asset's fair value is zero and it may not be used anymore...

but it unrecovered basis is $100

If such asset is disposed - that is reported as teh sale at zero price and the loss will be realized ($100)

That loss from form 4797 will be used to offset rental income.

Lev
Lev, Tax Advisor
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