Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

My client is selling two of his rental properties. I know…

My client is selling two...
My client is selling two of his rental properties. I know that I should use form 4797 to enter this on his taxes. But his brother did all the repairs because he lived close by, so the agreement was when they sold, the profits would be split 50/50. How do I show this on the 4797 form? I'm thinking along the lines that I should add 50% of the actual profit to line 21 which would effectively reduce his profit by half.What do you think?
Show More
Show Less
Ask Your Own Tax Question
Answered in 3 hours by:
3/19/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,694
Experience: Taxes, Immigration, Labor Relations
Verified

We may not divide teh profit on 4797...

That agreement actually is a partnership agreement...

As one brother provided teh property and another his labor (and materials) - that is reported on partnership tax return - form 1065 - and in this case - the sale transaction still is reported on 4797 - but attached to the partnership tax return - and each brother would get K1 reporting his share of the profit.

That would be the proper way to divide the profit based on the agreement.

Questions?

Ask Your Own Tax Question
Customer reply replied 1 month ago
I guess I'm a little confused. Probably because I don't understand how partnership reporting works. Once the numbers are entered on form 4797 won't my tax software automatically enter the profit (assuming there is a profit) to Schedule D and then to the 1040? How does the K-1 reporting change this?

When you put amounts into the tax return of the owner - that sale should be transferred to form 4797 and the gain will be transferred to schedule D - assuming long term gain...

That is correct. In this case we will not be able to divide the gain because the income realized from the property belong to the owner.

.

But you may not reflect here the agreement to split the profit.

In this situation - all income will be assigned to the owner.

The owner may however to pay the brother fro remodeling services without forming a legal partnership - that will allow the owner to add to the basis the cost of remodeling - and reduce the taxable gain.

However - the owner will also required to issue form 1099misc to report the amount paid to the brother for his services.

Ask Your Own Tax Question
Customer reply replied 1 month ago
I'm sorry, but now more confused than ever. You've moved from suggesting to issuing a k-1 to saying we now cannot divide the gain at all. I'm going to make a request to speak to another advisor.

Yes - these are different options.

But that are your rights - I will opt out - let see what other experts may add.

Ask Your Own Tax Question
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,008
Experience: 35 years tax experience, including four years at a Big 4 firm.
Verified

I'mCustomer I see you asked for a different expert. I can assist.

Ask Your Own Tax Question

Would a phone call help? That way I can address what you were told, as well as advise.

I'll make that offer now.

Ask Your Own Tax Question
Customer reply replied 1 month ago
The two rental properties were sold in Oregon. Do you have knowledge of Oregon tax laws?

I know the Federal laws, and most states follow Federal guidance in this area. And yours is a Federal tax question.

I'll check to see if there is a difference for you, but I don't think so. Let me check and advise.

PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,008
Experience: 35 years tax experience, including four years at a Big 4 firm.
Verified
PDtax and 87 other Tax Specialists are ready to help you
Ask your own question now

phone call completed.

Ask Your Own Tax Question
Was this answer helpful?
Ask PDtax Your Own Question
PDtax
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,008
5,008 Satisfied Customers
Experience: 35 years tax experience, including four years at a Big 4 firm.

PDtax is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,451 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

56 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,124 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
Mother-in-law wants to sell a rental property that sustained
Mother-in-law wants to sell a rental property that sustained severe fire damage. One of 3 houses on the lot is a total loss. There is an interested buyer, but we are unsure what the value of the prope… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
I'm on Federal Disability, on my Federal Tax forms there are
I'm on Federal Disability, on my Federal Tax forms there are special provisions for this income. How do I handle it on my California State Income tax filling Married Joint? … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
100% of a rental property was reported by taxpayer for 12
100% of a rental property was reported by taxpayer for 12 years. A relative on title for estate planning received 50% of sale proceeds. How is this correctly reported? … read more
Lev
Lev
Tax Advisor
32,694 satisfied customers
On line 17, Form 1120 ,C Corp Federal Tax return are state
On line 17, Form 1120 ,C Corp Federal Tax return are state corporate income taxes deductible.If I am doing my Federal C Corp returns for 2017 are the state corporate income taxes due but not paid yet … read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,939 satisfied customers
I filed my state and federal taxes electronically and then
I filed my state and federal taxes electronically and then realized that I accidentally omitted something that significantly changes my refund from the federal and my payment to the state. I need to f… read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,939 satisfied customers
Where do I report the sale of a commercial rental property?
Where do I report the sale of a commercial rental property? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,939 satisfied customers
Tax Question. Taxpayer has rental property and sustains
Tax Question. Taxpayer has rental property and sustains flood casualty loss. His expenses to repair exceed the insurance payments. If this is reported on Form 4684 does this properly flow to the 1040,… read more
Lev
Lev
Tax Advisor
32,694 satisfied customers
State and federal tax question. My wife creates jewelry at
State and federal tax question. My wife creates jewelry at home to sell. She sells it online and to the general public. She sells it to individuals and at events. She does pay N.C. state tax quarterly… read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,939 satisfied customers
Topic: tax law Probate law. deceased person received $$ in
Topic: tax law Probate law. deceased person received $$ in 2017, (reissued check) which was initially a check dated 2015 and reported on a w-2 in 2015 and related federal taxes were withheld on the w-… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,066 satisfied customers
Completing taxes with rental property and keep running into
completing taxes with rental property and keep running into this error "Error or Omission: Form 1099-MISC - Invalid Other Income Selection On the Form 1099-MISC from this 1099-MISC you indicated that … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,066 satisfied customers
If you received a form 1099-c from a rental property where
If you received a form 1099-c from a rental property where is it reported on the 1040. Ex. Property held for over a year. Amount owed per 1099- C is 150,000 fmv 90,000 … read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
931 satisfied customers
A real estate partnership has several rental properties. The
A real estate partnership has several rental properties. The partnership has been in existence over 30 years and has only a couple mortgages.The partnership has no other activity except renting real e… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
931 satisfied customers
BONE FIDE PUERTO RICO LAW. Military and I paid federal taxes
Military and I paid federal taxes but my home of record is puerto rico they also took state taxes … read more
Mark Anderson
Mark Anderson
Attorney
Doctoral Degree
10 satisfied customers
If a decedent owned a rental property and reported on their
If a decedent owned a rental property and reported on their 1040. What happens after they die and the rental properties are still reporting income. The income gets reported on form 1041? What will be … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
The new federal tax law doubles the amount of money that's
The new federal tax law doubles the amount of money that's automatically exempt from the federal estate tax -- to roughly $11 million of an estate for someone who was unmarried. The provision remains … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
My question is regarding US tax law for overseas property. I
Hello, My question is regarding US tax law for overseas property. I am a US citizen. My husband is a UK citizen. I have no legal status in the UK. He has no legal status in the US. We live in the UAE.… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,124 satisfied customers
Where do report for Partnership (LLC) returns using Form
Where do report for Partnership (LLC) returns using Form 1065 income recipient from taxable federal grant? Specifically, 1099-G, Box 6.… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
931 satisfied customers
How do I report rental property sold for income tax in 2017?
How do I report rental property sold for income tax in 2017? I bought if for 50k and sold if for 50 k.… read more
Lev
Lev
Tax Advisor
32,694 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x