Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
New Member
posted Apr 19, 2020 8:54:45 PM

Water Tank Replacement and Sold Rental Property

Hello All,

 

I have a question regarding the sale of a rental property, that was completed after capital improvements to the building.

 

In 2018 we replaced a water tank for $10,000. (My research told me that this should be a CCA Class 8 expense to be amortized over 5 years, and not all in the current period).

 

In 2019 we sold the property for $100,000 more than what we purchased it for. I understand we can deduct certain realtor fees, etc...

 

I was wondering how do we treat the undepreciated portion of the water tank? If we amortized $2000 in 2018, there is still $8000 in out of pocket costs that I am not sure how to deduct in 2019 for selling the home. (The replacement of the water tank was necessary to selling the home, but not conditional to it, if that makes a difference?)

 

Thank you! 

0 1 256
1 Replies
Level 3
Apr 23, 2020 12:08:27 PM

In Schedule 3, you'll be scrolling down and looking for Section 4.
Here you'll enter the address of the property sold, along with 'Proceeds of Sale' (what you sold it for), followed by the ACB (what you purchased it for, plus the legal fees at the time) and lastly the 'Outlays and Expenses' (which are the legal fees and, say, realtor fees associated with the sale).  Enter the data, and make sure there are no errors. TurboTax will do the math and enter the figure in the last box, and will place the resultant calculation in boxes 136 and 138