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big toes
Returning Member

What to do with remaining dollars from rounding off at the end of depreciation table for business equipment?

When original basis of business equipment being 100% depreciated is not a multiple of the number of useful years, rounding off to a whole dollar per year produces a remainder of a few dollars after depreciating for the fixed number of years. What should I do with the few remaining dollars? Do I need to continue to keep them in my books, or how do I remove them from my books?

 

I ask because in form 8858, Schedule C, it asks for the value of assets. I've deprecated all my business equipment this year, but there is $10 remaining from all the rounding. If I enter $10 as the end of year asset value, then next year form 8858, I'd have to start with $10 value of assets that are no longer being depreciated. Or would I enter $0 for the beginning value of next year, or $0 for the ending value of this year?

 

For example, a computer display costs $282, 100% depreciation, straight line, half year, ADS, 5 years:

1: $28

2: $56

3: $56

4: $56

5: $56

6: $28

remaining: $2

2 Replies
tagteam
Level 15

What to do with remaining dollars from rounding off at the end of depreciation table for business equipment?

I am going to page @Critter-3 but you most likely need an rounding adjustment account for your books.

 

Regardless, I do not believe you want to carry over the $10 to the following tax year; you will want to start with $0 for the value of assets.

Critter-3
Level 15

What to do with remaining dollars from rounding off at the end of depreciation table for business equipment?

In the last year of depreciation ALL the remaining basis is taken. 

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