I've received conflicting information on how to report assets purchased in years past but never claimed. I will give one example and hope someone can confidently steer me in the right direction:
I am a photographer, by hobby for years but officially as a business (LLC) as of Jan 10, 2021.
I purchased a brand new camera in Jan 2018 for $3000. It has never been claimed in any regard for tax purposes.
Here are the two ways I have been told to enter it but I don't know which is correct:
1. Enter it for the full $3000 as tick the box that I purchased it new. Enter "Placed into Service Date" as 1/10/2021 as this is when I became a business.
2. Enter the reasonable current value of the camera (based on Used Pricing at reputable websites) and do not click the box that this was purchased new. Enter Placed into Service Date as 1/10/2021.
Also, does it change things that despite not being a business until 2021, I still use a ton of the old content I created with that camera prior to become a business? For example, I might sell a print today (reported as 2022 business income) of a photo I took in 2018.
Thank you for any clarification!
