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I need help in reporting the sale of rental property in 2017…

I need help in reporting...
I need help in reporting the sale of rental property in 2017.
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Answered in 9 minutes by:
3/25/2018
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,642
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Hi Don,

My name is***** will assist you today.

The IRS forms used to report the gain or loss on the sale of rental property on Form 4797, Sales of Business Property. Individuals typically use Schedule D (Form 1040), Capital Gains and Losses, together with Form 4797.

Please let me know what specific questions you have.

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Customer reply replied 3 months ago
I have all of the numbers regarding the sale; how do I fill out the form? Do I begin with Schedule D, Form 4797, or what. My HRBlock software is not helpful
Customer reply replied 3 months ago
I need you to walk me through completing the form(s)

Assuming you held the property longer then one year you will start with Part III #19 of the form 4797

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Customer reply replied 3 months ago
No

You held the property for less than one year?

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Customer reply replied 3 months ago
ok, I have the copy of the form in front of me

How long was the property rental property?

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Customer reply replied 3 months ago
I have "residence", acquired 07/01/1986; it was vacation rental from that date until its sale
Customer reply replied 3 months ago
I have had the property longer than one year.

Ok, if the property was owned longer than one year you will start with part III of form 4797.

Generally, you will complete lines 20,21,22,23 and 24 of form 4797

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Customer reply replied 3 months ago
ok. I have the following numbers: Line 20, 60,000; Line 21 Basis, cost plus expenses, 48172; Line 22 Depreciation 39633;
Line 23 Adj basis 8539; Line 245 Total Gain 51461
Customer reply replied 3 months ago
Where do I go from here?

51461 goes in line 30

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Customer reply replied 3 months ago
ok, done

Generally, line 31 when you sell only one investment property will be zero

Then line 32 in your specific situation will be 51461--- This number will carry up to line 6

"Enter the portion from other than casualty or theft on Form 4797, line 6"

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Was the home owned as a partnership or S Corp?

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Customer reply replied 3 months ago
no
Customer reply replied 3 months ago
51461 entered on line 6

Yes, enter 51461 on line 6

___

Then 51461 will carry down to line 9 and transfer to schedule D

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On Schedule D you will complete Part II Long-Term Capital Gains and Losses—Assets Held More Than One Year

Starting with line 11 Gain from Form 4797, Part I;

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Customer reply replied 3 months ago
line 7 is left with no entry. Line 2a (g) asks for the sales price...i.e. $60000. That's my hang up. Do I ignore that? Line 7 asks for the sum of 2 through 6
Customer reply replied 3 months ago
Line 7 would be 111,461 with that scenario.

Rental property is section 1250 property, which is why we completed section III instead of the top part of section I

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Customer reply replied 3 months ago
I think you've solved my problem.

You don't complete both Section III and section I for rental property.

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I see, yes, that is very confusing when you are first trying to complete the forms

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Customer reply replied 3 months ago
Thanks, ***** ***** print this discussion?

I copy and paste, then put into a word document for "friendlier" printing or save the link as a favorite

Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,642
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Customer reply replied 3 months ago
Thank you.
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