Discussion Archives:Code 467 Rental Allocation

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Discussion Forum Index --> Advanced Tax Questions --> Code 467 Rental Allocation

Discussion Forum Index --> Tax Questions --> Code 467 Rental Allocation

Taxplanet (talk|edits) said:

3 June 2010
In this situation a building was purchased with a 467 lease agreement that is amortizing the rental income over the term of the loan to balance out the actual rental payments which are over a shorter period of time. The building is being sold. The facts are Selling Price = 3000000, NBV = 3500000, loss on sale = 500000. Then there is the matter of the 467 loan amortization which is a liability on the balance sheet at the time of sale of 900000. The question is, what happens to the 467 balance? Is this recaptured as income for tax purposes? If it is, is it offset first by the capital loss of 500000 and is it ordinary or capital gain income?
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