Fill Form 4797 Pros 2023-2024

Hi everyone, my name is Anthony Fontana. I'm an IRS enrolled agent with EI Tax Resolutions. If you just bought a rental property, you're gonna need to check out this video to find out the cash treatments of the various closing costs found on your closing statement. Alright, now before we go line by line through the closing statement, I got to discuss the three various taxing categories that these closing costs may fall under. Now, those three are the basis adjustment, rental expense, or capitalized costs that result in amortization expense. I know this sounds like a lot of tax jargon, and that's why I'm gonna go through these one by one for you guys. Okay, the first category we have here for tax treatment on the closing statement is the basis adjustment. Now, we need to know what the basis adjustments are because when we go to sell the home, this is going to come into the calculation of figuring the capital gain or losses that you may have to pay tax on when you sell. So, first of all, what is the basis? The basis is your purchase price plus or minus these basis adjustments that we're gonna find on the closing statement, plus the improvements that you may make to the home, minus any depreciation expense you've taken throughout the years. This is going to be what we call the adjusted basis. The adjusted basis is going to go into that capital gain or loss calculation, which we have over here. Now, the calculation is pretty straightforward. It's the selling price of the home minus any selling expenses, which you're gonna find on the closing statement when you sell the home, minus your adjusted basis, which we have from over here. It's gonna give your capital gain or loss,...