I have had a small business in the audio space for about 20 years. I need to shut it down, and am not sure how to handle the physical assets (equipment) that have been on the books (and depreciated) for years. All the articles that I've read about this process simply say to sell the assets and put the proceeds against debt or distribute to primary owners. But a) there is no debt, and b) I don't want to sell the equipment outright - I want to keep it as a "hobby", where I can use it to help out various local organizations as a volunteer. Do I need to "sell" it to myself? Any help, links would be appreciated.
@pointtx wrote:
Do I need to "sell" it to myself?
You do not need to sell the assets to yourself if you have been operating as a sole proprietor (i.e., filing a Schedule C each year) upon conversion to personal use.
If you are using TurboTax, you do need to indicate the date the assets were converted to personal use in the program to stop depreciation.
In the unlikely event you had opted for a section 179 deduction in the past, you will have a recapture event.
@pointtx wrote:
Do I need to "sell" it to myself?
You do not need to sell the assets to yourself if you have been operating as a sole proprietor (i.e., filing a Schedule C each year) upon conversion to personal use.
If you are using TurboTax, you do need to indicate the date the assets were converted to personal use in the program to stop depreciation.
In the unlikely event you had opted for a section 179 deduction in the past, you will have a recapture event.