sold for gain, then repo'd, not renting. Basis help

[schirallicpa]

Ok - I just cannot get my mind around this.

TP purchased property in 2004.  Reported sale in 2011 with gain of 12K reported on 2011 return.  Basis at time of sale was 39K.  Was sold on land contract and TP reported interested each year.  2015 buyer walked, and TP repossessed.  I reported additional gain on repossession of property of 3K.  Now, in 2016, they decide to rent it.  I'm not sure what my basis is now.  or do I amend to remove the reported gains?

Too early in the tax year for basis questions!!

[OldJack]

Basis before sale plus taxable gain(s) reported, less non-taxable capital payments received (with interest payments) equals new basis.

 

[BulldogTom]

I hate this crap too, but I will give it a shot. 

How much of the purchase price (principal) was paid on the contract?  I don't know what a land contract is.

I think it would go like this:  Original Basis 39K + gain recognized - amounts of principal paid on note. 

So if the 51K from the purchase price was all on a note, and the buyer only paid interest on the note before they walked, I come up with 54K for the basis (39K + 12K + 3K - 0).

This is on the fly so check me on this.

Tom
Newark, CA

[DANRVAN]

10 hours ago, schirallicpa said:

Ok - I just cannot get my mind around this.

TP purchased property in 2004.  Reported sale in 2011 with gain of 12K reported on 2011 return.  Basis at time of sale was 39K.  Was sold on land contract and TP reported interested each year.  2015 buyer walked, and TP repossessed.  I reported additional gain on repossession of property of 3K.  Now, in 2016, they decide to rent it.  I'm not sure what my basis is now.  or do I amend to remove the reported gains?

Too early in the tax year for basis questions!!

Not enough information given.  Did section 1038 apply to repo?  (Sounds like it did). If so basis equals:

(1) basis of note at time of repo

(2) + gain recognized on repo

(3) + repo expense

see examples at Reg 1.1038-1

 

 

 

[schirallicpa]

Thank you for the reference DANRVAN.  And as always I appreciate every one who helps out when we all have those "I can't think about this any longer" moments!!