Sale of Residential Real Property


B

BobLeavitt

I am selling my 25% TIC interest in an apartment building that I acquired in 1993. I do not live in the building. The selling price exceeds the basis (and the original purchase price).

Do I understand that I am required to allocate a part of the sale price to personal property that I have been depreciating (carpets, refrigerator, stove)? If so, any suggestions as to how one determines the current value of a roomful of 3 year old carpet (and 2 year old carpet and 4 year old carpet) , as well as used appliances of various ages. I am talking small amounts here - my share of the cost of a refrigerator is $100, my share of the carpet in some of the units is $400. Looking for practical, rather than theoretical, advice.

Is the personal property what is termed Section 1245 property?

Thanks for your help.

Robert Leavitt
 
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A

Arthur Kamlet

I am selling my 25% TIC interest in an apartment building that I
acquired in 1993. I do not live in the building. The selling price
exceeds the basis (and the original purchase price).

Do I understand that I am required to allocate a part of the sale price
to personal property that I have been depreciating (carpets,
refrigerator, stove)? If so, any suggestions as to how one determines
the current value of a roomful of 3 year old carpet (and 2 year old
carpet and 4 year old carpet) , as well as used appliances of various
ages. I am talking small amounts here - my share of the cost of a
refrigerator is $100, my share of the carpet in some of the units is
$400. Looking for practical, rather than theoretical, advice.

Is the personal property what is termed Section 1245 property?

Yes, the carpet and appliances are Section 1245.


One common method for allocating sales price to Sec 1245 property is
to say its the same as its curently depreciated value.

That has the handy dandy effect of generating zero gain or loss
on 1245 property.
 
S

Stuart Bronstein

One common method for allocating sales price to Sec 1245 property
is to say its the same as its curently depreciated value.

That has the handy dandy effect of generating zero gain or loss
on 1245 property.
Unfortunately the buyer would prefer a higher value, since it would
allow him to depreciate it faster than if that money were allocated to
the real estate.

Stu
 
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I

inky dink

Stuart Bronstein said:
Unfortunately the buyer would prefer a higher value, since it would
allow him to depreciate it faster than if that money were allocated to
the real estate.
Then have the buyer do his homework, and provide values and substantiation.
 

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