Discussion:179 Recapture

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Thanks in advance for your help.}} Thanks in advance for your help.}}
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 +{{ForumReplyPost|UserID=Taxtamer|Date=2 October 2008|Text=If the asset was still a 100% business use asset when sold, you do not have any sec. 179 recapture. You simply have the sale of a business asset with a basis of $ 0 for $ 2,000, so a gain of $ 2,000, subject to "normal" 1245 recapture as ordinary income (part III of 4797)
 +Only way you have to worry about sec 179 recapture is if business use dropped below 51% prior to sale.}}

Revision as of 16:38, 2 October 2008

Discussion Forum Index --> Basic Tax Questions --> 179 Recapture
Discussion Forum Index --> Tax Questions --> 179 Recapture

Gtaxman1 (talk|edits) said:

2 October 2008
I have a client that just sold a truck used 100% for business. Here are the facts:

Bought truck for $7,000 in 2005 and took 179 for the whole thing in 2005. Sold the truck in 2008 for $2,000.

I do not have much experience with disposition of business assets and would like someone to confirm my understanding.

SL depreciation up to date of sale would have been $4,900.. hence he will have to recapture $7,000-$4,900 = $2,100. This would be reported in part 4 of the 4797 and will flow to the Sch C as other income.

If he sold the truck for $2,000 and his basis was now $2,100, can he use the $100 loss anywhere? If so, where would i report that?

Thanks in advance for your help.

Taxtamer (talk|edits) said:

2 October 2008
If the asset was still a 100% business use asset when sold, you do not have any sec. 179 recapture. You simply have the sale of a business asset with a basis of $ 0 for $ 2,000, so a gain of $ 2,000, subject to "normal" 1245 recapture as ordinary income (part III of 4797)

Only way you have to worry about sec 179 recapture is if business use dropped below 51% prior to sale.

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