If I report the sell of an asset (which I just did) will Turbo Tax calculate this for me? If not where in Turbo Tax do I do this?
If you sold the property, enter the transaction in the Sale of Business Property section.
You will have to adjust your cost basis by the Section 179 deduction taken.
What does that mean and where do I do that? Example: Bought a camera for $200 in 2020, sold it for $40. I reported I sold it for $40 is there anything else I do and where? Thanks.
You enter the sale in the Sale of Business Property section of the program.
Which version of TurboTax are you using?
$40 would obviously be your sales price, but you would need to adjust the $200 purchase price (downward, of course) by the amount of the Section 179 deduction you took (which I presume would be $200 giving you a basis of $0).
I use the current online version. I went to the list of business assets from prior years and hit edit then indicated I was no longer using the asset and entered the sale price. Where would I make the adjustment to zero? And would it be zero mo matter what year I bought and claimed the 179 deduction? Thank.
How much was your Section 179 deduction?
Reduce your basis by that amount (plus any other depreciation deductions taken) and enter that figure as your cost.
The 179 deduction was $200. I don't see where I enter zero and does that mean I lose the full deduction from 2 years ago? I also see there is a section popping up where it wants me to compute total depreciation prior to 2022 and depreciation computed using straight line. Does that mean for everything all these years?
Enter $0 in the box in the screen as shown in the screenshot below.
@MB86 wrote:
....does that mean I lose the full deduction from 2 years ago?
You do not lose the deduction, since you already took it, but that amount is "recaptured" when you sell (basically at your ordinary income tax rate up to a maximum of 25%).
I don't think I have that screen I have the assets list and it's wanting me to fill out a total recapture of all property in a different section ....not sure how this works for property converted to personal. I wish I hadn't paid for Turbo Tax already as it looks like I'll have to go pay a tax person. But thanks for trying either way!
If you have already paid for the service, call TT support for some assistance.
If you have used TT in the past, this should not be difficult for a support person to help walk you through your question / issue.
@MB86 wrote:I don't think I have that screen I have the assets list and it's wanting me to fill out a total recapture of all property in a different section
If you SOLD the business assets, then all you need to do is enter the information in the "asset"/depreciation section of TurboTax. The program should handle it all. There is no "Section 179 recapture" when it is sold (it is just 'regular' depreciation recapture, and the program will handle that). The program should NOT be asking about it in a different section.
If you CONVERTED those asset to personal use, then "Section 179 recapture" will apply. That is where it gets more complicated, and perhaps another section of TurboTax will be asking you about that (I'm unsure about the navigation in TurboTax).