Property review preparation | Published 9 October 2026
Rental Sale Tax Review File: Basis, Depreciation and Planned Exit
Prepare the tax review before agreeing to a sale structure. The records needed to evaluate a disposition extend beyond the purchase price and the expected selling price.
Reconstruct the property history
Gather purchase documents, improvement invoices, depreciation schedules and prior study reports. Separate property, land, furnishings and later additions as recorded by the preparer. Flag missing schedules rather than estimating the history from memory.
Identify suspended amounts and ownership
Ask the preparer for the activity-level loss records and applicable basis schedules. Confirm the legal seller and the tax owner, including any changes over time. Give the reviewer the complete ownership picture if the property sits in a partnership or other entity.
Document the proposed transaction
Bring the draft agreement, proposed allocation, selling costs and expected closing date. State whether you are considering an exchange or another exit structure. Coordinate with qualified counsel and any necessary intermediary before taking steps that may constrain the options.
Compare after-tax cash and timing
Request a written estimate that separates proceeds, debt payoff, transaction costs and taxes. Ask how prior depreciation and state treatment affect the comparison. Update the estimate when terms change rather than relying on an early headline number.
Printable preparation worksheet
Use a private working copy to record the document location, outstanding question and person responsible for completing each item. These blank fields do not submit or store information online. Keep sensitive data in your secure records.
| Record or question | Document location or missing item | Owner and follow-up date |
|---|---|---|
| Closing and capital-improvement records | ________________ | ________________ |
| Complete depreciation history | ________________ | ________________ |
| Ownership and suspended-loss schedules | ________________ | ________________ |
| Draft sale terms and expected date | ________________ | ________________ |
| After-tax cash questions | ________________ | ________________ |
Before you request advice
Mark unresolved items clearly and explain any deadline that may affect the review. Ask for an individualized conclusion and a written work scope before relying on a recommendation. A completed preparation worksheet is evidence organization, not approval of a tax position.
Continue with the relevant AE service or guide
Review the related AE decision and next steps. Confirm the specific entities, tax years, deliverables and fees covered by your engagement.
Related preparation resources
- Cost Segregation Quote Comparison File: Scope, Cost and Return Coordination
- STR Participation Evidence File: Tasks, People and Corroboration
Published by AE Tax Advisors. General education and preparation support, not individual tax, legal or accounting advice. Illustrative material does not describe a real client outcome or guarantee a result.
Focused implementation guides
Resolve the related evidence question before carrying a planning assumption into implementation.
- Rental sale asset register: A rental sale includes land, building and separately tracked assets.
- Prior rental depreciation gaps: Old returns and available depreciation schedules do not agree.