ljwalters Posted March 23, 2011 Report Share Posted March 23, 2011 Client owns rental condo with ex-husband. She filed a quit claim deed this year, so now she owns 100%. How do I add the additional depreciation to her asset sheet? Facts, I think this was supposed to happen during the divorce 5 years ago. She gave nothing in return. I am guessing I would add the remaining of his basis to her asset worksheet, and depreciate the rest over 27.5 years, leaving her portion the same. (Similar to the way you should handle a 1031 exchange is this right? Thanks for your help Linda and buddy Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 23, 2011 Report Share Posted March 23, 2011 Yes, you are right. If it was part of the divorce settlement her basis would be his old basis. Isn't it crazy how long these situations can drag on before they finally settle everything?! Quote Link to comment Share on other sites More sharing options...
ljwalters Posted March 24, 2011 Author Report Share Posted March 24, 2011 Yes, you are right. If it was part of the divorce settlement her basis would be his old basis. Isn't it crazy how long these situations can drag on before they finally settle everything?! Thanks KC. Am I right to start the depreciation of his old basis over at 27.5 years? Linda and buddy Quote Link to comment Share on other sites More sharing options...
jainen Posted March 24, 2011 Report Share Posted March 24, 2011 >>start the depreciation of his old basis over<< Acquiring the second half of the ownership will not change the depreciation schedule of the first half. Henceforth you will have to show the house as two assets, just like you do when they add basis by remodeling. However, you can combine the two land percentages if you happen to track them on the depreciation schedule for non-deductible convenience. Quote Link to comment Share on other sites More sharing options...
ljwalters Posted March 24, 2011 Author Report Share Posted March 24, 2011 Thanks, I thought that was the way it shoud go. No land because it is a condo. Linda and buddy Quote Link to comment Share on other sites More sharing options...
MN dhawk Posted March 24, 2011 Report Share Posted March 24, 2011 If the property was sold less than a year after the second half purchase, would a gain be short term? Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 24, 2011 Report Share Posted March 24, 2011 No, the gain is long term on her half, short-term on his, another good reason for keeping the two as separate assets. Quote Link to comment Share on other sites More sharing options...
jainen Posted March 24, 2011 Report Share Posted March 24, 2011 >>short-term on his<< Oh frabjous day! I finally caught kc making a mistake! Property transferred incident to divorce carries over the holding period as well as the basis. Quote Link to comment Share on other sites More sharing options...
MN dhawk Posted March 24, 2011 Report Share Posted March 24, 2011 Partners A & B (1065 type partners) have had a commercial rental for 10 years. Partner A buys out B's half 12/31/09. A sells entire property 1/15/10. Are any of the gains short term?? Quote Link to comment Share on other sites More sharing options...
jainen Posted March 24, 2011 Report Share Posted March 24, 2011 >>Are any of the gains short term?? << Yes (assuming there were gains over two weeks). As written, the property was owned by the partners, not the partnership. Was that a trick question? Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 24, 2011 Report Share Posted March 24, 2011 >>short-term on his<< Oh frabjous day! I finally caught kc making a mistake! Property transferred incident to divorce carries over the holding period as well as the basis. It's really not that hard, I make mistakes all the time, just not usually too often about tax law! LOL Still, you are right on this one, I was overlooking the divorce angle, just not thinking it through. Still, if it gives you a 'frabjous' day, it's worth it!!! Quote Link to comment Share on other sites More sharing options...
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