I am filing my first tax year (2019) this year and have equipment purchases (mobile disc jockey) from prior years. Are these to be entered on my tax form as startup expenses OR business assets? Also, how far back can I claim said purchases (i.e. 5 years, 7 years)?
i would enter them as business assets.
since these were acquired in prior years, the tax basis is the lower of cost (reduced by any prior business depreciation) or Fair Market Value on the date your business began operation, if you did not commence operations in 2019, they can not be depreciated. they can only be depreciated starting with the date you placed them into service, generally the date you began operations, for your current business.
Thanks for the feedback. As a follow-up, is there a timeline for how far back I can claim equipment purchases as business assets? Also, how can I figure out the typical depreciation schedule for dj equipment?
You can't go back and claim them as you had no business before 2019. If you began your business last year, you would enter them in the depreciation section and begin to depreciate them using the FMV or basis as explained above. You begin depreciating on the date they were placed in service.
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