User's Manual - Drake Software

Sales of Assets
Drake Software User’s Manual
Screen code: 4562
Screen code: 4797
Screen code: 6252
1. For the sold asset, open screen 4562 and complete the Date sold field in the If
sold section on the right side of the screen. This causes the program to stop calculating
depreciation.
2. Select as Property type “IN” (for §1245 property) or “IS” (for §1250 property).
3. View the return, checking to see if there is an amount on Form 4797, line 31. If
line 31 contains an amount, proceed to Step 4 below. If it doesn’t, proceed to
Step 5.
4. Enter the amount from Form 4797, line 31, on screen 6252, line 12 (Depreciation
to recapture).
5. Complete screen 6252 by entering all other installment sale information. Listed
below are specific instructions and explanations for completing the separate parts
of screen 6252.
• Lines 1-15 (Part I of Form 6252) — Complete these lines for the year of sale
only. Lines 1-15 must also be completed in subsequent years in order to have
the gross profit percentage carry through to subsequent years.
TIP
As an alternative, and only if the current year is not the year of sale,
you can enter the Gross Profit Percentage on the 6252 screen. Use a
whole number, not the decimal equivalent. For example, enter 62% as
62, not as .62.
Like-Kind Exchanges
• Line 19 and Receipt category section (Part II of Form 6252) — Complete
line 19 (use a whole number, not a decimal equivalent) and the Receipt category
fields for the year of sale and for any year in which a payment or debt
must be treated as a payment on installment options.
• Part III (Related Party Sale Income) — Complete Part III if (a) the sale
was made to a related party, and (b) the income is not from the final payment
in the current tax year.
• Unrecaptured Section 1250 Gain — If unrecaptured §1250 gain is present,
enter the gain amount in the Unrecaptured Section 1250 Gain field (to the
right of line 19). The taxable amount is calculated on the WK_1250 worksheet
and is carried to Schedule D, line 19 based on these calculations.
6. View the return. See line 31 of Form 4797 for the recapture amount (if any).
If an asset has been traded and requires continued depreciation and there is an increase
in basis that must be depreciated, you can link like-kind exchange information to the
appropriate depreciation details.
To enter an asset as a like-kind exchange:
Screen code: 4562
Screen code: 8824
1. Open the 4562 (Depreciation Detail) screen for the asset that the taxpayer traded
(or gave up).
2. Make an on-screen notation to indicate that the asset was traded (for example,
type an A before the description in the Description field).
3. Open the 8824 (Like-Kind Exchanges) screen and complete the fields for the
like-kind exchange.
116 Tax Year 2012