It depends on the date acquired, however I will provide some information and you can update if you have additional questions.
- If you placed an asset in service and out of service the same year you are not allowed to depreciate it. You would report only the sale.
- If you had the asset before 2023, depending on when it was placed in service for business, it sounds like you have completed the sale appropriately in the asset itself. It sounds to me like the asset was already fully depreciated before 2023 which would create a full taxable gain of the selling price, $2,500. This would be ordinary income because you are recapturing the depreciation expense used in the past to the extent of the gain on the sale ($2,500 in your situation).
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
