JamesG1
Expert Alumni

Business & farm

In the case of the section 179 deduction, you have held the computer asset more than five years.  There is no section 179 recapture.  The asset has returned to personal use.

 

IRS Publication 946 page 22 states:

 

You may have to recapture the section 179 deduction if, in any year during the property's recovery period, the percentage of business use drops to 50% or less. In the year the business use drops to 50% or less, you include the recapture amount as ordinary income in Part IV of Form 4797.

 

In the case of the special depreciation allowance, you have not sold the asset.  There is no special depreciation recapture.  The asset has returned to personal use.

 

The same IRS publication page 26 states:

 

When you dispose of property for which you claimed a special depreciation allowance, any gain on the disposition is generally recaptured (included in income) as ordinary income up to the amount of the special depreciation allowance previously allowed or allowable.

 

Retain copies of your home office depreciation records.  Upon the sale of the personal home, you will report the depreciation that was allowed or allowable as a home office depreciation deduction.

 

If you had reported under the Home Office Simplified Method, depreciation would be treated as zero and the basis of your home will not be reduced.  

 

See IRS FAQ here.

 

@jj150 

 

 

 

 

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