Liquidating equipment

[GerritB]

I am retiring and winding down my professional service S corp, will probably fold it in 2022.  I sold about 20 pieces of test equipment in 2021, mostly on eBay.  TT for Business is trying to take me through listing each and every asset, including when it was put in service.  I don't have time for this.  Some things were sold in batches for a single price, and trying to find the dates of first service for all this would be excruciating.  The total proceeds are not worth the trouble.  Is there a way I can simply list the assets as a lump and pay capital gain tax on the sum, or something similar?  I don't need the absolute minimum tax exposure.  Thanks for any help.

[DaveF1006]

It depends.  If you been depreciating these assets in past tax returns, then you will need to dispose each asset individually.  The IRS has a record of these assets (if you have a history of depreciating them). If you haven't depreciated your test equipment, then you can report these as a lump sum payment but keep in mind, this could trigger an audit unless the proceeds are so low enough to where these won't raise a red flag. My suggestion is to depreciate these individually and then use you best guess regarding dates and what you paid for them.

[GerritB]

Thanks for the quick reply, Dave.  All the equipment was either expensed or has depreciated completely.  Would I report that as a capital gain, or income, or?

[DaveF1006 · Accepted solution]

It would not be a capital gain or loss but an ordinary gain or loss. For the equipment that was depreciated, the amount of depreciation claimed in previous years need to be recaptured. 

[GerritB]

I'll see if I can make that work.  Thanks for the help!