User's Manual - Drake Software

Drake Software User’s Manual
Sales of Assets
Screen code: 4562
4. Calculate the return. In View mode, view Form 8824 and note the amount calculated
for the “Basis of like-kind property received” line. (Generally, this amount
becomes the adjusted basis of the new asset, unless an additional amount was
incurred in obtaining it.)
5. Open the 4562 screen for the new asset. In the Description field, make a notation
to indicate that the asset was traded (such as an A before the description).
(As an example, if a Ford 150 is traded for a Chevy Blazer, the descriptions on the
4562 screens might be “A-Ford F150” and “A-Chevy Blazer.” This notation
makes the traded assets easier to identify.)
6. Enter any increase in basis as the beginning cost.
The depreciation on the old asset continues over the remaining life, and depreciation
for the new asset starts, using the 8824 basis for the correct number of years.
Basis of Primary Residence
Screen code:
HOME
Use the HOME screen to accomplish the following tasks:
• Report the sale of a primary residence
• Enter data to determine the taxpayer’s basis in the primary residence and calculate
the tax implications of the transaction
• Allow the program to reduce the maximum exclusion if the taxpayer is eligible for
part, but not all, of the gain exclusion
• Apply the appropriate treatment for the gain (loss) on the transaction
• Indicate that a surviving spouse is taking the MFJ exclusion for gain on the sale
• Enter data to calculate the amount of recapture in a year of sale if the First-Time
Homebuyer Credit (Form 5405) was taken on the home
• Enter data for Form 5405, Part III (Disposition or Change in Use of Main Home
for Which the Credit Was Claimed) and Part IV (Repayment of Credit Claimed
for 2008 or 2009)
Related
Worksheets
A Primary Residence Calculations worksheet (WK_2119) is generated with the return
when the HOME screen is used. It consists of up to three pages:
• Worksheet 1: Adjusted Basis of Home Sold
• Worksheet 2: Gain (or Loss), Exclusion, and Taxable Gain on Sale of Home
• Worksheet 3: Reduced Maximum Exclusion
These pages are for informational purposes only to allow the basis in the home to be
tracked. If no date of sale is entered, only Worksheet 1 contains data when generated
with the return.
Updating
from the
Prior Year
Data entered in the Date home was purchased, Basis of Home, and Form 5405
fields are included in the Drake update routine. These fields are updated as long as
there is not a date in the Date home was sold field. Once the home is sold, there is no
need to continue tracking the basis.
Tax Year 2012 117