How to process an asset being sold in Turbotax?

[fhturner]

Hey Everyone—

When selling a business asset (in this case, a computer), in Turbotax, do I need to BOTH:

1. edit the item as sold/disposed in the Asset Summary list, AND

2. include the sale price as income elsewhere?

Or does editing the asset and entering the sale value there obviate the need to include the money from the sale as income (IOW, does Turbotax automatically account for that)?

Thx,

Fred

[Irene2805 · Accepted solution]

When selling a business asset:

1. Yes - Edit the item as sold/disposed in the Asset Summary list, BUT 
2. No - You do not need to include the sale price as income elsewhere.

Just enter the information on the sale and TurboTax will calculate any gain/loss and include it on Form 4797 for your business.

[fhturner]

Thank you, Irene, for the quick response and helpful clarification! Much appreciated!!

[fhturner]

Okay, so, I have a related, follow-up question:

If an asset that I'm selling is past its "life span" defined by the IRS (in this follow-up case, 5 years for a computer that I took the Section 179 deduction on back in 2011), what do I do in TurboTax then? It no longer shows up on my asset section, so there's no way to click the Edit button and mark it as sold.

Saw another thread talking about selling depreciated equipment, and the recommendation was to search for and use "Sale of Business Property". Is that what I need to do...create a sale w/ the identical description? Or is there another way to edit that asset? Or does my tax liability change since it has exceeded its "life span"?

Thanks again,

Fred

[RobertG]

Yes, report it as sale of business property.

If it is has been fully depreciated the basis will be zero and the entire sale price will be taxable.

[fhturner]

Thanks, Robert! Was looking for a little further clarification on whether or not you can "get back" to that asset entry in TurboTax, rather than having to create the same asset (for sale) entry all over again. No way to go to the entry to do an "Edit" when it has dropped off the normal asset list due to age?

Thanks,

Fred

[AmyC]

No, if the asset is not showing in the asset list, you can just do the 4797.

[fhturner]

Thanks, Amy!

I just wanted to post back that I figured out why I wasn't seeing the couple of assets that I needed to mark as sold— they were under an earlier, sole proprietor business/Schedule C that I used before I had my LLC and FEIN. I was able to go back to the assets there and mark them as sold. In the end, the resulting dollar amounts were the same, but this was a little cleaner. Just wanted to follow back up w/ that in case someone else was reading this in the future and wondering what I had been smoking! 😄

Thx,

Fred

[Prbusha]

How to process an asset being sold in Turbotax?

[Carl]

The simplest way to report the sale of a single asset in TurboTax, is to report the sale where you have the asset listed.

For example, for a SCH C business you'll have the asset entered in the Business Assets section. Just go to that section, elect to edit the asset and start working it through, Select YES on the screen that asks if you stopped using the asset in 2019 (or whatever tax year you're working on).  On the Special Handling Required screen, select NO. Screens after that will ask you for sales price and any other needed sales information.

The program will *AUTOAMTICALLY* take care of depreciation recapture and will correctly figure any taxable gain on the sale *for you* and all will be reported on the 4797 and SCH D as applicable.