Reduced Cost in AMT F4797


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I bought a rental residential property (a single house) in a foreign country on 2/23/2011 and sold on 8/6/2018.
Gross sales price was $1,838,560 depreciation since aquisition = $109,114 and cost = $1,160,779.
So the gain is $786,895. These are the numbers in Part I of F4797. The accountant filed also AMT F4797,
where Gross sales price and cost are the same as the regular F4797 (the numbers in the above)
but he used $608,011 as the cost in AMT F4797. So the gain in AMT form is $1,339,663.
I asked the accountant how he got $608,011 as the cost for AMT F4797 but I did not get his response.
I want to get it amended if it is wrong.

The costs ($1,160,779) in the regular F4797 was the purchasing price ($1,134,700), expense of sale ($18,560), lawyer's fee($909), travel to a foreign country to complete the sale ($ 4,622) and food ($1,988). The rent was $500 per month but the renter did not pay most of it. The total payment from 2011 to 2018 could be about $28,000

When do I have to reduce the cost (from $1,160,779 to $608,011) for AMT F4797?
How can I get the cost ($608,011) from the above numbers?
Thank you.
 
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Werner Reisacher

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Something is not adding up properly. Your remark about the renter not paying most of it...., guessing your rental income, and the fact that the Accountant did not answer your questions, are indications. that you would be hard-pressed to come up with a clear picture of the actual financial situation and the income generated and reported to the IRS and under FATCA rules over the past 7 years. Being vague about any of those foreign transactions can have consequences that go far beyond that of the IRS rules. You need professional advice.
 
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Thank you for your response.
As I did not live in the foreign country, the renter skipped rent payments one or two months every year.
I filed FBAR every year and met FACTA requirements.
A tax law firm in Minnesota which is specialized in foreign transaction did this for me from 2011 to 2016 returns.
I did it myself in 2017. A local accounting firm I hired last year did this for 2018.

I sent money from my retirement savings to buy the house In a foreign country. The US federal government allowed me to send money to the foreign country. I still have permit number from federal government. When I sold the house, the money came back to the US. My foreign bank account was designed for foreigners to buy a house per the foreign country‘s law. So the bank keeps record of receiving rents and paying taxes (property tax and tax paid to the interests etc). All the foreign documents associated with the house, operation and selling it were authenticated by the government. From the authenticated documents, the accountant I hired last year came up the numbers I posted above. I hired him because he could do foreign tax credit. My small town in the western NY does not have any more than three accountants, who could do foreign tax credit. I guess the accountant did not answer me because his office is closed due to coronavirus (I asked him this question by email) and he may be busy with helping other clients’ tax returns.

My question was when regular cost of the rental house at the entire disposition is different from AMT cost.
Could you give me some answer to this question?
I read the instructions for F4797 & 6251 but I could not find the answer.
You said that something is not adding up properly .
Could you give me more details about this? So I can learn more.

If the reduced AMT cost is wrong, I would get it amended.

Thank you for your time and response.
 

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Werner Reisacher

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