Dispose of an Asset
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ncbound0204
Level 1

Dispose of an Asset

I had a piece of equipment for our business that had a catastrophic failure and wasn't worth repairing so it was just disposed of. How do I indicate that on TT? We didn't get any money for disposing of it, so there was a loss.  Thanks so much.

4 Replies
DavidD66
Employee Tax Expert

Dispose of an Asset

Report it as if you sold it with proceeds of $0.00.  This will result in a loss of whatever the undepreciated cost basis is.  If the equipment was fully depreciated, then there will be no loss (or gain) on the disposition.  To report in TurboTax Home & Business:

  • Type "Sale of Asset" into Search
  • Click on "Jump to sale of asset"
  • Follow the Step-by Step to enter your asset sale.
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ncbound0204
Level 1

Dispose of an Asset

Thank you, exactly what I needed!!

DavidD66
Employee Tax Expert

Dispose of an Asset

You're welcome.  Thanks for using TurboTax!

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Carl
Level 15

Dispose of an Asset

Actually, reporting it as a sale of $0 is just flat out wrong. If you work through the asset, when you come to the screening "Did you stop using this asset in 2020?", select YES. Then one or two screens later you will have a screen called "Special Handling Required?" Read the information on that screen so you will understand why I am telling you to click YES. Then click YES.

Note that you will "NOT" be asked for any sales information then.

If the item was not fully depreciated, then you can claim the difference between the depreciation value and the depreciation already taken, as a loss. Otherwise, if the item was fully depreciated, then you have no loss to claim since the item was fully depreciated and deducted from taxable business income already.

 

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