I have a personal photography business for which I've taken section 179 expense in prior years for camera & computer equipment, but my business is temporarily on hold as I don't have time to run it right now. Do I just report 0 income and 0 expense for this business or do i need to do a section 179 expense recapture? I haven't sold any of the assets. They just aren't being used at all.
No, you don't need to do a Section 179 recapture since you are not out of business. Just report zero income and zero expenses for this year. If you don't continue the business for awhile, then you may need to dispose of the assets (take them out of service) and recapture the depreciation at that point. The IRS will typically like to see a profit in 3 of the previous 5 years when you have a business. That said, there are circumstances that prevent that from happening. Just be aware..
Converting Assets to Personal Use
When you convert an asset to personal use, there is no gain to report. However, you must report any section 179 recapture this year.
A section 179 deduction is subject to recapture if you converted the asset to personal use before the end of its depreciable life. Learn More
If you sell the asset in the future, you must still report it as the sale of a business asset even though you are now using it for personal purposes. Therefore, you must keep all records of your business use of the asset, and of the amount of depreciation claimed.
If during the time you used the asset for business your percentage of business use was less than 100%, you will have two sales to report. You must report the sale of the business portion of the asset and the sale of the personal portion of the asset separately.
You can/should convert business assets to personal use any time the business is inactive. You will not pay any recapture at that time unless you used accelerated depreciation, even then it may only be partial recapture.
Click thru to 179 recapture. Two boxes: sec 179 taken when property was purchased and Depreciation that could've been taken through 2016. In the underlined help link: in the second box you must calculate the depreciation...using any allowable method, see IRS pub 946. If you have more than one sec 179 asset to recapture this year, prepare a statement showing your computations for each asset, and enter totals in the boxes on the screen. Then attach the statement to your return.
Then I guess you manually enter the recapture total on Schedule C Other Income. Not sure what you do with the individual asset. Does Home & Biz make this easy? It's definitely worth a $10 upgrade!!! Thank you again!