1120s Reporting of Income & Expenses - Posted by Greg (IN)

Posted by JHyre in Ohio on February 02, 2002 at 06:13:55:

The depreciation proration is fine…just treat them as “contributed” to the S-corp…that is, “sold” in exchange for shares in the S-corp. You calculate depreciation separately on your books and report the total number on the 8825…you have it broken out by property and year in the event of audit, but the IRS just gets the gross amount on the 8825, no elections needed. For years that you acquire new properties, you also need to fill out Form 4562…which provides the IRS with more detail per property.

John Hyre

1120s Reporting of Income & Expenses - Posted by Greg (IN)

Posted by Greg (IN) on February 01, 2002 at 14:32:56:

I have some questions with respect to the reporting of rental income & expenses of properties that are lease/option. Here is the situation:

All of my properties are sold on a lease/option.

Some of my properties are bought on a lease/option.

Many of these properties have been shown on my 1040 from the prior year. Mid 2001, I have established an S-corp and transfered these properties over to the corporation. I therefore have reported income/expenses on these properties for part of the year on my 1040 schedule E itemitizing income and expenses on a per property basis. I am treating these properties as “sold” for a -0- gain at the time of transfer to the s-corp. I am then picking up the properties in the s-corp and continuing the depreciation using the same method and basis as I was using as an individual. Is this all ok?

Also, can I now simply report income and expenses on cumulative basis on form 8825 which flows to line 2 of schedule K instead of separately itemizing each property? Do I need to make any special “elections” in order to do this?

Thanks for your help!