Leaderboard

This may not fit your situation depending on what the 1245 assets are, but I've often used their sale price as their remaining basis. If you bought a water heater for $1k 10 years ago, its basis is zero--which is exactly what a willing buyer would be willing to pay for a 10-year-old water heater. Same with awnings, driveways, used furniture. Usually the amounts involved aren't that big so it doesn't over- or understate the total profit a heck of a lot. There is a form where the buyer and seller agree on the purchase price of each asset (8594?), but I have never seen one outside of tax classes. You can tell your client to take a stab at it and see if the buyer agrees to those numbers as those will be his/her basis going forward. (Warning: the seller will want low valuations to minimize profit whereas the buyer will want high valuations so there is something left to depreciate.)

When I first got into taxes back in 2005 I was on a board like this. Any time a question like this would come up, the same poster would declare something to the impact of "If the client refused to get a full appraisal on every item and didn't deliver it to me in a timely manner, I would immediately fire them." There was usually a part added on about legal liability he had surmised if his demands weren't met. Always wondered if he was trolling or had 2 clients left. Same guy always declared every small business tax return he did had to have a full audit of their accounting by him or he wouldn't sign the return. Somewhere he'd determined that by signing the return we were guaranteeing to the IRS the validity of everything the client provided us.

@BLACK BART - good thing you got that hot tip! Can't wait to hear how much it saves her!