If a rental property is sold, does the selling price need to split into land part and building part on Form 4797?

When a rental property is sold, supposed it is sold with 1,200,000. Does it need to split two parts on Form 4797? Supposed the price split as below:

1. ) Land selling price: 400,000

2.) Building selling price: 800,000

Where to obtain the above data? Does it search from final settlement statement, or from the county website which you pay property tax?

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Best answer by TaxGuyBill

Yes, although in many cases it won't make a difference.

An official appraisal is best. But if that is not available using the PERCENTAGES from the county assessments is fairly common.

Level 15

No.

My guess is you may have more questions.

Answers are easy. Questions are hard!

Level 15

Yes, although in many cases it won't make a difference.

An official appraisal is best. But if that is not available using the PERCENTAGES from the county assessments is fairly common.

Level 4

Thank you for your input. Based on the instruction link you sent. The selling price should be split to two parts: Land and building.

Land appreciation as a capital gain, need to be entered at Part1 line 2 on form 4797

The building appreciation as capital gain, need to be entered at Part III line 20

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