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Self emp.Bought truck 12/2014 for business,took 179 1st yr. Closed business 9/1/16.not able to sell truck until '17.How do I figure 179 recapture& sell of business asset?

 
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Level 4

Self emp.Bought truck 12/2014 for business,took 179 1st yr. Closed business 9/1/16.not able to sell truck until '17.How do I figure 179 recapture& sell of business asset?

If the business was a sole proprietor, single member llc or a partnership, when you closed the business down the truck was distributed to you as is. It will keep all 179 that was used. You will show this as a disposition on your personal return and show the 179 depreciation as a reduction of the basis.

 

If the business was a corporation (s-corp included) you would have to have recognized a 'sale' for the FMV of the truck when you closed the business down and then distributed the truck to you. Then you would have basis in the truck of whatever the FMV of the asset was.

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Level 15

Self emp.Bought truck 12/2014 for business,took 179 1st yr. Closed business 9/1/16.not able to sell truck until '17.How do I figure 179 recapture& sell of business asset?

To meet the conditions of the Section 179 deduction, you must continue to use the asset more than 50% in your business until the asset has reached the end of its useful life.

If you stopped using the asset in your business before the end of its useful lifespan for whatever reason (such as it was sold, destroyed, or stolen) or the business use of the asset dropped below 50%, the Section 179 conditions are no longer being met and the IRS will instead apply regular MACRS depreciation to that asset.

The difference between the Section 179 deduction and the "used up" portion of MACRS depreciation is called a Section 179 recapture and must be reported as income.

 

 

you were subject to section 179 recapture in 2016.  this increases basis so you would have a smaller gain to report in 2017