You'll need to sign in or create an account to connect with an expert.
If it is a tangible asset, such as machinery, you don't. Whatever value remains is the property of the business at closing and sold at a profit, loss, or wash to an outside entity or owner.
For example, you depreciated a file cabinet but it has remaining value of $100. You either sell it for $150 and the business includes the gain of $50 before closing the books, sell it for $50 (no related parties) and claim the loss, or you figure it is worth $100 and transfer it to yourself at no gain and no loss.
For an intangible asset, such as a franchise fee you can claim the remaining value. It can be done a couple different ways. You could sell the original asset as a wash in 2017. Then enter the remaining value as an expense with a description of "Intangible asset depletion". You could also enter the remaining value as a new asset with a 1 year depreciation for 2017. Because it is franchise fee, it is treated differently than a tangible asset and can be captured upon the business closing.
[Edited 02.27.2018 | 11:19AM]
If it is a tangible asset, such as machinery, you don't. Whatever value remains is the property of the business at closing and sold at a profit, loss, or wash to an outside entity or owner.
For example, you depreciated a file cabinet but it has remaining value of $100. You either sell it for $150 and the business includes the gain of $50 before closing the books, sell it for $50 (no related parties) and claim the loss, or you figure it is worth $100 and transfer it to yourself at no gain and no loss.
For an intangible asset, such as a franchise fee you can claim the remaining value. It can be done a couple different ways. You could sell the original asset as a wash in 2017. Then enter the remaining value as an expense with a description of "Intangible asset depletion". You could also enter the remaining value as a new asset with a 1 year depreciation for 2017. Because it is franchise fee, it is treated differently than a tangible asset and can be captured upon the business closing.
[Edited 02.27.2018 | 11:19AM]
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
taxhelp19
New Member
trrsj
New Member
obeteta
New Member
samT5
New Member
jasonmark1993
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.