How can I change the ownership percentage of a rental property?

Forum|Forum|4 years ago
October 11, 2021
2 replies
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I would like to change the ownership percentage of a property from 50% to 100% but the system doesn't allow me. I have a Self-Employed Turbotax version. Thanks

TurboTax Self Employed Online

Carl11_2

Employee

You can not just arbitrarily change ownership of of asset. Doing so will completely screw things up; particularly with depreciation.

If you owned 50% before and have been reporting that 50% for a number of years, when you acquuire the other 50% then you enter that new 50% as a completely new asset. Example:

Acquired 50% of rental in 2010. Overall cost basis was $100,000. "MY" half of that cost basis is $50K. So that's what I enter. My half of the structure value is $40K and that's what I depreciate.

In 2020 I acquire the other 50% and I pay $80,000 for that other 50%. I enter that acquitision as a physically separate asset with a cost basis of $80,000, with $60,000 allocated to the structure.

Depreciation for my initial purchase of the first 50% started in 2010.

Depreciation for my additional purchase of the other 50% starts in 2020 and is based on what I paid for that other 50% since I purchased it from the other owner in 2020 at the fair market value of their half in 2020.

Critter-3

The basis of this other 1/2 will depend on how you acquired it ... was it given to you, inherit it or did you buy the other person out ? Have you both been filing a Sch E or did you have a Partnership ?

fredcote

My spouse and I used to file separately and now file jointly. Using my account in Turbotax the percentage of ownership remains at 50% and can't be changed to 100%.

Carl11_2

Employee

My spouse and I used to file separately and now file jointly. Using my account in Turbotax the percentage of ownership remains at 50% and can't be changed to 100%.

If you change it, that will completely skew the depreciation history.

In your specific case, because you're going from MFS to MFJ, is enter an entirely new property on your joint return at 100%. Use all the original dates and the 100% numbers and the program will "assume" the prior year's depreciation at 100% and the history should be right. Then you can delete the 50% ownership property and file your joint return showing you both own the property at 100% combined.