Overview › Area
Rentals & the condo sale
1450 Fremont Way (all year) and the Austin condo (sold 10/15).
Preparer Priya Raman · due 2026-03-27
Reviewer Daniel Ortiz · due 2026-04-08
Partner Helen Strand
Time 0 of 3.5 h budget
1450 Fremont Way (Sacramento, managed by Capitol Keys, rented all year): rents 37,200, expenses 53,157, result -15,957.
The repairs line 13,300 includes an 11,000 whole-system HVAC replacement in August.
1200 Barton Hills Dr #4C (Austin condo): rented to 09/30, sold 10/15/2025 for 395,000 — result -6,523 and a section 1231 gain of 105,040, of which 50,340 is unrecaptured section 1250 gain (taxed at up to 25%).
Passive: with the gain and the K-1 income, net passive income is 93,210, so this year's losses and the 2024 suspended losses (-16,150) are all allowed.
The condo sale (Form 4797)
Checks that don't trust the engine (4)
HVAC-CAPITAL · Rentals & the condo sale
HVAC replacement: repair or improvement?
judgmentFails
A replacement of an entire building system is a restoration (betterment) and must be capitalized; the engine expensed 11,000 inside repairs 13,300. Depreciate over 27.5 years from 08/2025. Engine what-if: federal +3,633, California +896.
Engine 13,300 · recomputed 2,300
How: Invoice D47 describes removing the furnace and AC and installing a new heat-pump system with air handler, line set and thermostat (permit). Call notes confirm a whole-system replacement.
Authority: Treas. Reg. 1.263(a)-3(k)(1)(vi), (k)(3)(ii)(B) (HVAC is a building system)
SchE.14A
13,300 → 2,300 — Capitalize the 11,000 heat-pump system (asset SAC-HVAC).
Tax: fed +3,633 · CA +896 engine what-if
Tax: fed +3,633 · CA +896 engine what-if
SchE.18A
13,891 → 14,041 — Add SAC-HVAC: 11,000 / 27.5 yrs, mid-month August (4.5 months).
no tax effect engine what-if
no tax effect engine what-if
Explain / dismiss instead
DEPRECIATION · Rentals & the condo sale
2025 depreciation recomputed per asset
Agrees
Every asset agrees (SAC-BLDG 13,236.36, SAC-ROOF 654.55, AUS-BLDG 7,139.39, AUS-FLOOR 190.00).
How: Straight-line / mid-month for each building asset; disposal month counts half.
CONDO-SALE · Rentals & the condo sale
Condo sale gain recomputed from the closing statement
Agrees
Gain 105,040; unrecaptured 1250 50,340. 1099-S (D52) proceeds agree.
Engine 105,040 · recomputed 105,040
How: Price 395,000 - (cost 310,000 + flooring 6,600 + selling costs 23,700 - depreciation 50,339.99).
PASSIVE-CARRY · Rentals & the condo sale
Suspended passive losses agree to 2024
Agrees
Fremont 6,300, Barton Hills 9,850; all released in 2025 (net passive income, condo fully disposed).
Engine 16,150 · recomputed 16,150
How: 2024 Form 8582 unallowed losses (D06 p9) vs carryovers used in 2025.
Depreciation by asset
| Asset | Placed in service | Method / life | Cost | Federal 2025 | California 2025 | AMT diff | Fed accumulated | Disposal |
|---|---|---|---|---|---|---|---|---|
| SAC-BLDG 1450 Fremont Way - building Rental: 1450 Fremont Way, Sacramento | 2019-07-01 | SL / mid-month · 27.5 yrs land 156,000 not depreciated |
364,000 | 13,236.36 | 13,236.36 | 0 | 85,484.83 | |
| SAC-APPL 1450 Fremont Way - appliances Rental: 1450 Fremont Way, Sacramento | 2021-05-10 | Federal: 100% bonus in 2021; CA: 200DB half-year · 5 yrs | 4,200 | 0 | 483.84 | 0 | 4,200 | |
| SAC-ROOF 1450 Fremont Way - roof replacement Rental: 1450 Fremont Way, Sacramento | 2022-04-18 | SL / mid-month · 27.5 yrs | 18,000 | 654.55 | 654.55 | 0 | 2,427.29 | |
| AUS-BLDG 1200 Barton Hills Dr 4C - building Rental: 1200 Barton Hills Dr Unit 4C, Austin | 2020-04-01 | SL / mid-month · 27.5 yrs land 62,000 not depreciated |
248,000 | 7,139.39 | 7,139.39 | 0 | 49,599.99 | 2025-10-15 · unrecaptured §1250 49,599.99 · §1250 ordinary 0 |
| AUS-FLOOR 1200 Barton Hills Dr 4C - flooring Rental: 1200 Barton Hills Dr Unit 4C, Austin | 2022-09-01 | SL / mid-month · 27.5 yrs | 6,600 | 190 | 190 | 0 | 740 | 2025-10-15 · unrecaptured §1250 740 · §1250 ordinary 0 |
| STU-LAPTOP Laptop (2022) Business: Lindqvist Studio | 2022-02-03 | Section 179 · 5 yrs | 2,800 | 0 | 0 | 0 | 2,800 | |
| STU-PRINTER Studio equipment - printer Business: Lindqvist Studio | 2025-03-21 | 100% special depreciation · 5 yrs | 14,200 | 14,200 | 2,840 | 0 | 14,200 | |
| STU-CAMERA Studio equipment - camera Business: Lindqvist Studio | 2025-03-21 | 100% special depreciation · 5 yrs | 16,300 | 16,300 | 3,260 | 0 | 16,300 | |
| STU-WORKST Studio equipment - workstation Business: Lindqvist Studio | 2025-03-21 | 100% special depreciation · 5 yrs | 7,500 | 7,500 | 1,500 | 0 | 7,500 |
All assets recomputed independently (check DEPRECIATION). Federal vs California differ only for assets that took federal special depreciation (SAC-APPL 2021, studio equipment 2025).
Rentals and passive losses
1450 Fremont Way — Sacramento
Documents (8)
Every line in this area (43)
Show all 43 lines
| F4562-E.total-A | Depreciation - 1450 Fremont Way | 13,891 | |
| F4562-E.total-B | Depreciation - 1200 Barton Hills Dr 4C | 7,329 | |
| SchE.1A | Property A | 1450 Fremont Way, Sacramento CA | |
| SchE.3A | Rents received - property A | 37,200 | |
| SchE.9A | Insurance - property A | 1,850 | |
| SchE.11A | Management fees - property A | 2,976 | |
| SchE.12A | Mortgage interest - property A | 14,900 | |
| SchE.14A | Repairs - property A | 13,300 | |
| SchE.16A | Taxes - property A | 6,240 | |
| SchE.18A | Depreciation - property A | 13,891 | |
| SchE.20A | Total expenses - property A | 53,157 | |
| SchE.21A | Income or (loss) - property A | -15,957 | |
| SchE.1B | Property B | 1200 Barton Hills Dr Unit 4C, Austin TX | |
| SchE.3B | Rents received - property B | 20,250 | |
| SchE.9B | Insurance - property B | 1,100 | |
| SchE.12B | Mortgage interest - property B | 6,900 | |
| SchE.14B | Repairs - property B | 1,800 | |
| SchE.16B | Taxes - property B | 5,544 | |
| SchE.18B | Depreciation - property B | 7,329 | |
| SchE.19B | Other (HOA dues) - property B | 4,100 | |
| SchE.20B | Total expenses - property B | 26,773 | |
| SchE.21B | Income or (loss) - property B | -6,523 | |
| SchE.2A | Days rented / personal use - property A | 365 / 0 | |
| SchE.2B | Days rented / personal use - property B | 273 / 0 | |
| F4797.20 | Dates acquired / sold | 2020-03-01 / 2025-10-15 | |
| F4797.21 | Gross sales price | 395,000 | |
| F4797.22 | Cost or other basis plus expense of sale | 340,300 | |
| F4797.23 | Depreciation allowed | 50,340 | |
| F4797.24 | Adjusted basis | 289,960 | |
| F4797.25 | Total gain | 105,040 | |
| F4797.26g | Additional depreciation after 1975 (section 1250) | 0 | |
| F4797.32 | Section 1231 gain from Part III | 105,040 | |
| F4797.7 | Net section 1231 gain | 105,040 | |
| F4797.8 | Nonrecaptured section 1231 losses from prior years | 0 | |
| F4797.9 | Section 1231 gain to Schedule D | 105,040 | |
| F8582.1a | Rental activities with net income (incl. Form 4797 gain on disposed property) | 105,040 | |
| F8582.1b | Rental activities with net loss | -22,480 | |
| F8582.1c | Prior-year unallowed rental losses | -16,150 | |
| F8582.3a | Other passive activities with net income | 26,800 | |
| F8582.4 | Combine lines 1d and 3d | 93,210 | |
| SchE.22A | Deductible rental loss after limitation - property A | -22,257 | |
| SchE.22B | Deductible rental loss after limitation - property B | -16,373 | |
| SchE.26 | Total rental real estate income or (loss) | -38,630 |
Sign-off
preparer
not signed
reviewer
not signed
partner
not signed
A sign-off fingerprints every value and document in the area. If anything it covered changes, it reopens on its own and tells the signer what moved.
Time
Area notes