Torn down rental home, and factor charitable donation

Technical topics regarding tax preparation.
#1
NOVATax  
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Rental property with prior depreciation and carry forward losses

Rental home is torn down to build primary home

Trying to clean up on sch E and 8582 and seems the best way appears to dispose of the property



Basis of rental home (excluding land) is $400,000, prior depreciation is $80,000, Charitable donation of some of the home items is appraised at $100,000

Is the disposition or sale price $0?

If so, is the basis reduced by the prior depreciation and donation?

This is creating a huge loss, and wondering if anyone has any insight if this is correct, or if I going about this all wrong.

Or should the property to be marked as converted to personal use, do not calculate gain or loss, and recapture the depreciation later whenever the new home is later sold. 26 U.S. Code § 280B.Demolition of structures

Then include the charitable donation on form 8283
 

#2
sjrcpa  
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Property is not disposed of in a fully taxable transaction so no loss allowed.

Second Chance donation?
 

#3
NOVATax  
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So I would say the carried for losses on the 8582 would stay and used to offset the other rental property?

Being not disposed in a fully taxable transaction, would that basically use up the depreciation on that home, and does this transaction need to be reported on the tax return on schedule D, with code L.

Yes, Second Chance donation
 

#4
sjrcpa  
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Depreciation stops.
I don't think it goes on Sch D at all.
I believe it is "as if" converted to personal use and you'll have a passive loss carryover.
I'd spend some time researching this since the return is highly likely to be audited due to the Second Chance donation.
 

#5
NOVATax  
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Thank you.

I have the 100 plus page detailed appraisal and guideline instructions from the appraisal company, that will be submitted via 8453.

Will also try to attach a PDF of the appraisal to the efiled return, if the software will allow


I appreciate your input
 

#6
sjrcpa  
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Make sure you attach the 8283 with signed donee acknowledgement and appraiser signature, too.
 

#7
NOVATax  
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Will do, thanks again.
 


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