Do I need to complete the recapture section if I indicate the item was sold in the asset section? Is depreciation recapture and gain calculated automatically?

beck53 · ‎June 1, 2019

Sold a business as an asset sale. I have prorated the portion of sale to equipment. I only have two assets with sec 179 that need to be recaptured. I am finding the process confusing. If I enter in the recapture the miscellaneous income section how is my basis affected for the calculation of gain or loss on the asset. My asset is 24427 the depreciation allowed would be 18977 leaving recapture of 5450 to be reported on the schedule c. The sales price for that item is 7800. Is my basis for gain now 5450. and the gain on the sale 2350? How does turbo tax know that? The data entry is confusing me.

Anonymous · ‎June 1, 2019

from the info you enter which would include date acquired, cost, MACRS life, 179 taken. you obviously know about reg 1.179-1(e)(1) which limits 179 recapture. did you consider that you asset might qualify for bonus depreciation? however, your gain between the 179 recapture and the ordinary gain on sale are always going to be $7,800 because that what you sold the asset for that had a zero basis after the 179 deduction. .

Do I need to complete the recapture section if I indicate the item was sold in the asset section? Is depreciation recapture and gain calculated automatically?

Deductions & credits