Where to find cost basis in tax return?

Question

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!

Karolina Powell · Answer

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.

Basit Siddiqi · Answer

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.

Account Closed · Answer

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.

Ryan Fox · Answer

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?

Ryan Fox · Answer

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

Andrew Strauss · Answer

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.

Ashish Acharya · Answer

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.

Karolina Powell · Answer

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).

Diyan Yap · Answer

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

Ryan Fox · Answer

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

Where to find cost basis in tax return?

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