I have clients who gifted a rental property to their daughter mid-year. I will be filing a Form 709 to report the gift, but I am unsure how to enter the disposition properly in ProSeries to make sure the capital gains and depreciation recapture do not flow to the tax return.
Solved! Go to Solution.
On the asset entry worksheets, in the disposal section, just enter the date it was disposed (gifted), with no sales price, that will remove it from the return as of that date with no "sale".
@Randy Haynes Give your client a printout of the final depreciation with YTD depreciation for the year of gift. The daughter will need that to set up the rental on her return, or for future reference when she sells.
Thank you. One of my pet peeves is new clients with rental properties whose previous preparers did not provide the taxpayer with complete depreciation details. I always provide that along with an explanation of the importance it carries upon disposition of the property.