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Level 1
April 23, 2021
Question

Sale of Rental Property Diagnostic

  • April 23, 2021
  • 1 reply
  • 4 views

Client sold a rental property consisting of land, building and improvements.  Getting critical diagnostic:

 

method differs from main asset of bulk sale in which it is included....should be input as separate asset.

 

Questions:

Is bulk sale the correct way to book?

If I sell improvements separate from land/building, how is purchase price allocated?

Is there something else I'm missing?

 

This topic has been closed for replies.

1 reply

George4Tacks
Level 15
April 24, 2021

Land (99) and building (code 85 or 87) can clearly go together. The improvements should be allocated separately, but since they are integral to asset being sold I have been known to cheat and go to the assets and change the method to match the building (but don't tell anyone I have done that.)

 

Answers are easy. Questions are hard!