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Allocating ST Gain and LT Gain on sale of Residential Real Property in Pro Series

Level 1

Taxpayer owned residential real property for 45 years and it was fully depreciated.  Property is fully rented.  Spouse dies in 3/2018 and surviving spouse gets a step-up in basis at DOD and begins to depreciate the rental property again.  New basis and so depreciation starts again.  Taxpayer sells the rental property in 7/2019.  After computing the adjusted basis which includes selling costs and depreciation taken, the gain on sale in $10,200.  Depreciation taken is $3,600 and so ordinary income is $3,600 and LT gain in $6,600.

I am having difficulty within ProSeries to separate the gain into ordinary income and long-term capital gain.  I would appreciate any suggestions given.

Thank you.

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2 Replies 2
Level 12

The program does that all automatically.  Other than reporting the sale, you don't really need to "do" anything.

The gain due to the depreciation should show up on Line 19 of Schedule D.


As a side note, it is not "ordinary income".  It is still a "capital gain", but it is taxed at ordinary rates, up to 25%.

Level 1

Thank you, TaxGuyBill.

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