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Level 3
March 28, 2026
Question

How to enter the sale of a rental property (partnership 1065)

  • March 28, 2026
  • 1 reply
  • 23 views

Hello - I have a partnership client that sold their rental property. I have numerous 8825 asset worksheets. When I click on the main 8825 worksheet and click the box that states "completely disposed of this property in 2025" and also the box "rental is a commercial property". I checked those two boxes and it didn't generate anything. Upon further research, I looked up the form 4797 pg 2. But when I go to tax help, it suggests that the disposition is entered into the asset worksheet. Well, I have about 8 asset entry worksheets every time there was an improvement to the property. I played around with form 4797 by entering a sales price and date of sale in the appropriate boxes but it doesn't pull over any basis amounts or depreciation. I feel like if I were doing this correctly, there would be more flow within the forms. Please help.

1 reply

dascpa
Level 11
March 28, 2026

Unless you have Fixed Asset Manager you have to dispose of each asset one by one in ProSeries. Create an Excel worksheet of all the assets, list the cost basis in the first column, the % of the total in the next. Then third column apportion the total sales price and in the final column apportion the cost of sale.

Note, if you know an asset(s) won't have a gain on sale (for example a dishwasher doesn't gain in value over time) then adjust your asset apportionment to what's logical. In the end the total is still the same.

After you have your numbers go back to ProSeries and enter the disposition information in each Asset Worksheet. It will then flow to all the appropriate tax return places.

teraAuthor
Level 3
April 11, 2026

Thank you for your response. I did this and entered the date of disposition, asset sales price (based on percentage of basis/total basis), and the percentage of the cost of sale. 

I am receiving an error: Prior Depreciation Rglr Tax is too large. For disposition calculations, depreciation cannot exceed business basis. 

I don't understand this error. The original basis for this asset is 22,628. The amount of sale (again, based on the percentage of this asset basis) is 39,423 and the PY depreciation is 9,304. Am I reading that error wrong?