jasdlm Posted March 13, 2019 Report Share Posted March 13, 2019 A client sold his primary residence (on 5 acres) in an installment sale. Sold two other pieces of farm ground on installment. 6252 done for the two pieces of farm ground. The barn the client used for farming, which has a basis of $50k and depreciation of $30k, is on the 5 acres sold with the primary residence, which sold for a total of $150k. The appraisal did not assign a specific value to the barn. I'm having a brain collapse. I can't figure out how to deal with this barn. Thanks so much. Some days I wonder if I still have what it takes to do this. Aaargh! 1 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted March 13, 2019 Report Share Posted March 13, 2019 You can't exclude any of the land that was used for farming, including the land which the barn sits on so you need to make a reasonable allocation. Was there an appraisal on the house? How does the appraisal compare to property tax statements? From what I have seen for property taxes there is usually about a half acre included with the house. Curious as to where the $50,000 basis for the barn came from. 1 Quote Link to comment Share on other sites More sharing options...
jasdlm Posted March 13, 2019 Author Report Share Posted March 13, 2019 40 minutes ago, DANRVAN said: You can't exclude any of the land that was used for farming, including the land which the barn sits on so you need to make a reasonable allocation. Was there an appraisal on the house? How does the appraisal compare to property tax statements? From what I have seen for property taxes there is usually about a half acre included with the house. Curious as to where the $50,000 basis for the barn came from. From a preparer long before me! My understanding is that the House and 5 acres has always been a separate, non-farmed plot, but the barn was built on that land. I'm not even clear what the barn was used for in the farming operation, because by the time I got the client, the spouse (farmer) was deceased, there was no equipment, and another person was running cattle on the Ag land (2 separate tracts) for cash rents. Unfortunately, my client is not too well informed about the whole thing. County has the land at $123,000 with $100k assigned to the house and $23k to the land. Thanks much. I really appreciate you weighing in. Do you think I should just apportion the sales price at the same percentage as the county appraisal and then take off $$ for a 1/2 acre of land (figured proportionately)? Quote Link to comment Share on other sites More sharing options...
jasdlm Posted March 13, 2019 Author Report Share Posted March 13, 2019 DANRVAN - You are 'da Bomb! Shining me on to the County Website allowed for a 'drill down' into a division of the 'building' value between the house and the barn. I can now figure this out proportionately. I love this site. Thanks so much! Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted March 13, 2019 Report Share Posted March 13, 2019 23 minutes ago, jasdlm said: Do you think I should just apportion the sales price at the same percentage as the county appraisal and then take off $$ for a 1/2 acre of land (figured proportionately)? 1/2 vs 5 acres depends on facts and circumstances. But with a barn claimed for depreciation........ Quote Link to comment Share on other sites More sharing options...
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