The business would be the one to report the depreciation recapture. A few things to keep in mind when converting business property to personal use.
- Corporation's are a separate entity and can not transfer property for personal use.
- The depreciation deduction is modified in the year of conversion from business use to personal use. You will need to reflect the number of months you used the asset in your business.
- At the time of conversion, you create taxable income called recapture income from your previous expensing deduction under section 179 and excess depreciation deductions on Section 280F(d)(4) listed property
- When the asset is sold or disposed of you will recognize a gain, loss, and depreciation recapture under Section 1245.
@mgmorris
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