Where to find cost basis in tax return?

[Ryan Fox]

I own about 16 rental properties.  From time to time, I consider selling a property and ask my CPA what he has as the cost basis so I can understand the tax ramifications.  Then there's a long wait...  Is there somewhere on my federal return where I could find this info?  TIA!

[Diyan Yap]

Is it in partnership OR Individual tax return? 
Tax reported as 12/31, if you need to find out the current month basis you need to see your Balance Sheet.
Tax return e.o.y shows on Schedule L

[Karolina Powell]

If you are reporting it on a schedule E (you are not taxed as a corporation or as a partnership in non-community property states) then no, there is nowhere on your tax return that shows your cost basis and your tax preparer likely doesn't know.  You would want to go back through your records and find your purchase price, your closings costs, and any improvements.  

Not that you asked, but keep in mind that when you sell, you will have to pay 25% of the depreciation back, whether you took it or not.

[Ryan Fox]

@Diyan Yap- It's an individual tax return, but I don't have a schedule L as part of my filed return.  

@Karolina Powell- My CPA filed my returns in the years that I purchased my properties, and I provided him all the info as to purchase price, closing costs, improvements, ect. over the years.  I could work backwards if I had to to add up all of the depreciation I claimed over the years and subtract that from my original basis, but I don't know what the original basis was.  Correct me if I'm wrong, but my understanding is the CPA would have made some decision when I purchased each property as to what the depreciable basis of each property was.  For example, 75% would be depreciable value attributable to the structure and 25% would be non-depreciable attributable to the land.  Do you know where I might find that percentage in my returns?  Then I can work backwards and find what my current basis is.

Thank you both for your help.

[Karolina Powell]

Quote from @Ryan Fox:

@Diyan Yap- It's an individual tax return, but I don't have a schedule L as part of my filed return.  

@Karolina Powell- My CPA filed my returns in the years that I purchased my properties, and I provided him all the info as to purchase price, closing costs, improvements, ect. over the years.  I could work backwards if I had to to add up all of the depreciation I claimed over the years and subtract that from my original basis, but I don't know what the original basis was.  Correct me if I'm wrong, but my understanding is the CPA would have made some decision when I purchased each property as to what the depreciable basis of each property was.  For example, 75% would be depreciable value attributable to the structure and 25% would be non-depreciable attributable to the land.  Do you know where I might find that percentage in my returns?  Then I can work backwards and find what my current basis is.

Thank you both for your help.

 Individual tax returns don't have schedule Ls.  Your schedule E will show what you are depreciating but not exactly how those numbers were determined.  Hopefully your CPA has provided you with his depreciation schedule, if not, he should be able to get that to you but it's not a part of your actual tax return.  It might be easier to add up your purchase price, closing costs, improvements and then subtract what depreciation he took over the years since that should be listed on Schedule E (assuming you have a copy of all of your returns with the property).

[Ryan Fox]

@Karolina Powell- He has not provided me the depreciation schedules, but I will ask him for that.  That's something he would have to keep up to date each year to calculate the amount of depreciation to claim on Schedule E, correct?

[Basit Siddiqi]

The client copy of the tax return should include a depreciation schedule of each rental property that you have.

If the tax return that you have does not include it, you should be able to request it from your accountant and ask if they can provide it to you annually going forward.

The depreciation schedule will include the original cost basis along with the accumulated depreciation.

Best of luck.

[Ashish Acharya]

To find your cost basis, check Form 4562 (and depreciation) in your tax return—this shows the property's original value for depreciation. You can also look at Schedule E, which connects to depreciation, though it won’t show the exact cost basis.

Since depreciation affects the final cost basis, you might want to ask your CPA for a summary of your properties' bases to save time in the future.

They should have a system where we can give you not just the basis but also a detailed gain (and estimated taxes) calculation within a day. We do.

[Zachary Jensen]

As others have mentioned you start on Form 4562, but in my opinion you should have a simple google sheet or excel to track all of this for your properties. That way it makes it easier for you and your accountant to make tactical decisions. 

[Andrew Strauss]

You can usually find the cost basis of your rental properties in Form 4562 (Depreciation and Amortization) on your federal tax return.

You should be able to get it from your CPA. If you are still not able to make it, you might have to go back and go through all your returns and property documents to figure out the cost. 

Going forward, you can keep a property wise detail of the cost basis, improvements, and any depreciation in either Excel or QuickBooks.

[Ryan Fox]

Thank you all for the responses, got it figured out.

[Jason Malabute]

Your individual tax return doesn’t include Schedule L; check Schedule E for depreciation, and ask your CPA for the depreciation schedule . Like what Basit said, the client copy of the tax return should include a depreciation schedule of each rental property that you have.

[Ryan Fox]

A follow up question to this.  If I decide to sell a rental property, my understanding is that my accrued passive income or loss on the rental becomes active income or loss.  I don't qualify as a real estate professional.  To calculate the accrued income or loss, is it as simple as adding up line 21 on the Schedule E for each year that I owned the property?  

[Aus Smith]

I Do not understand why tax professionals refuse to provide the depreciation schedule. 

perhaps they do it so when the next tax proffessional inevitabably request this information from the previous, this will be a key indicator they are not a client anymore. I guess thats better than getting ghosted. Anyways, investors should demand more from their tax professionals.

You have ultimate responsibillity for what is reported on your return. You sign it saying you understand and believe what is reported to be correct. How can you know that if you dont have a copy of the depreciation schedule. Lastly, your bookkeeper should be doing this anyway to ensure depreciation reported on your books ties to the tax return. I will not begin to complain how lazy accountants are when it comes to the AJEs. Again, demand more from your CPA. Being 'busy' doing taxes is not an excuse for not providing these insights into your tax return and bookkeeping. 

Good luck with your endeavors! 

Austin L. Smith, CPA

[Ryan Fox]

@Aus Smith- Oh, wait till I get started with attorneys!