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Replace roof on rental property

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Level 2

Client replaced roof on a rental property.  The old roof was not fully depreciated and therefore is a loss.  The loss on Form 4797 Part 1 is 0.  Why is the loss not reported?

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7 Replies 7
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Level 15
Level 15

You entered the date of disposal of the old roof on the asset entry worksheet with 0 as the sales price?  or how did you dispose of the old roof?


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 2

Yes I entered disposal date with a sales price of 0

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Level 2

Yes I entered information on the asset input sheet.  It shows the loss on the asset input sheet but not on Part 1 of the 4797.  The transaction shows but with 0 loss.

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Level 15
Level 15

weird, I just tested it on a return (I didnt have a tester file with a roof, but it had bathroom remodel) and it pulled the loss to the 4797 Part I.

can you right click on the Zero that youre seeing on the 4797 and Cross Reference to where thats coming from?

Someone more familiar with this type of thing may have to offer you more ideas as to whats causing this circumstance, sorry.

 

 


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 5

You should be able to dispose of the old roof by entering the date that the new one was placed in service on the date of sale line. Then enter zero for proceeds

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Level 15
Level 15
That works for me, theyre saying that it shows the loss on the asset entry worksheet, but it doesnt carry over to the 4797

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 2

Figured it out.  The rental property has a loss this year and the loss is suspended because of income limitations.  So therefore the loss on the roof that was replaced becomes part of the suspended loss.