- quote -

Well, if the dishwashers were depreciated and if a portion
of the sales price could be properly allocated to the
dishwasher, then I'd think they would be reported separately
as 1245 property, and any resulting gain from such
allocation would be ordinary.

Of course no one does this.

But the land is another matter.

Allocating building from land is going to treat only gain
from sale of building to Sec 1250 rates, while the land
being 1231 is going to get the same capital gains rates as
your IBM stock.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Seth Breidbart" <sethb[at]panix.com> wrote:
- quote -

when doing what you propose above, you are in fact
allocating. You don't need to allocate on a per-item basis,
you can allocate as you propose (i.e., $X for the
furnishings & $Y for real property). If the amount
allocated to the furnishing exceeds the cost basis, then you
have a gain, if the amount allocated to the furnishings is a
loss, it's a non-deductible loss.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

A.G. Kalman wrote:
- quote -

I should have clarified the last part of my own reply. In
order to simplify the process and have the gross selling
price match the 1099, can one add the FMV of the personal
property to the cost basis to arrive at the taxable amount?
The result is the same as adjusting the selling price for
the FMV of the personal property.

--
Alan
http://taxtopics.net

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Seth Breidbart wrote:
- quote -

They bought the house vacant. They bought the appliances and
furniture while resident in the house. They are now selling
real estate and personal property.

--
Alan
http://taxtopics.net

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

A.G. Kalman wrote:

- quote -

In Washington state a "consumer use tax return" should be
filed in a situation like this. However, lenders and escrow
companies hate this kind of thing and will generally insist
that you remove all references to personal property from the
deal before they will close it.

- quote -

Nope. Except that a loss on the appliances would not be
deductible. So, I think the amount you would add to basis
would be the FMV of the appliances, not original cost. This,
in effect, reduces the gross proceeds by the FMV that
~should~ have been allocated to the appliances in the first
place (if I'm thinking correctly this morning <grin> ).

MTW

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Seth Breidbart wrote:
- quote -

Yes. Per the IRC you have sales of two different classes
of property.

When a corporation sells out, lock stock and barrel
(assuming the corporation itself is not sold, but sales of
assets), we separate the sale into it's component parts,
land, building, equipment, goodwill, covenants, etc etc and
report each separately. Same for a personal residence,
except that the land is part and parcel of the real estate,
while personal property not built in (dishwahers, stoves are
usually built in) are usually not subject to any reporting
since they usually sell for less than cost.

ChEAr$,
Harlan Lunsford, EA n LA

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

A.G. Kalman wrote:
- quote -

As I am fond of telling one of my cliens who owns and
operates laundramats, "It'll all come out in the wash."

ChEAr$,
Harlan

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

MTW wrote:
- quote -

I believe the sale tax law and regs in California only
require sales tax to be collected by retailers and anyone
who is required to have a seller's permit. Individuals who
sell items at garage sales and I think even E-Bay are not
required to have a seller's permit. In fact, if memory
serves me right, there was bill that was floated early in
2005 and defeated, that would have required sales tax to be
remitted on such sales.

The reason that I raised the issue was that there will be a
1099-S generated for the sale. I believe the 1099 will
reflect the gross selling price. It is certainly easier to
just leave the selling price as is and add the cost of the
appliances and furniture to the cost basis before computing
the realized and taxable gain.

Anybody have a problem with this approach?

--
Alan
http://taxtopics.net

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

A.G. Kalman <glendale202-tax[at]yahoo.com> wrote:

- quote -

Do they have to allocate? Or could they say "We bought the
house, furnishings, etc. for a total of $X and sold for $Y
so the net profit is $Y-X"?

Seth

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"A.G. Kalman" <glendale202-tax[at]yahoo.com> wrote:

- quote -

sounds reasonable to me, but don't forget to include
delivery and installation charges, and maybe a value for a
personal shopper. That sounds reasonable to me, too.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

A.G. Kalman wrote:

- quote -

You've got the gist of it for sure. Here is sale of two
different classifications; real property and personal
property. No exclusion of gain on personal property as you
know, hence just like the secret of success in accounting
is.. allocate, allocate, and pro rate; it applies to
taxes as well.

ChEAr$,
Harlan Lunsford, EA n LA

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

glendale202-tax[at]yahoo.com (A.G.=A0Kalman) posted:

- quote -

Technically, I suppose that might be a valid issue, were the
net proceeds from the sale of one's home to exceed the
allotted "tax-free" limits ($250,000 or $500,000 MFJ).

Otherwise, the net realization from the sale of used
household appliances and furniture would virtually always be
_less_ than their cost -- ergo, no tax consequence (except
to reduce the net proceeds from the sale of one's home).

Bill

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

A.G. Kalman wrote:

- quote -

Sounds good to me. Note that there is also a sales/use tax
issue here.

MTW

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Taxpayers sell their main home at a profit and are not
eligible for the exclusion of gain. The selling price
includes all appliances plus some furniture. The selling
price is all inclusive. Am I correct that in order to
compute the gain on the sale of the real property, one has
to come up with a "reasonable method" to allocate some of
the proceeds of the sale to the personal property that was
sold? I am assume a reasonable method would be the FMV of
used appliances and comparable used furniture currently
offered for sale by dealers, thrift shops, classifieds
and/or auction websites.

--
Alan
http://taxtopics.net

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >