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reporting disposition of rental property that was gifted mid-year

Randy Haynes
Level 3

 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.

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Just-Lisa-Now-
Level 15
Level 15

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".


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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3 Replies 3
Just-Lisa-Now-
Level 15
Level 15

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".


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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George4Tacks
Level 15

@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. 


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Randy Haynes
Level 3

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.