I am filling out a Disposition Worksheet to report the sale of a nondepreciable item used in my business. It was a small computer accessory that was expensed a few years ago. I sold it on eBay for $25 and recovered some of my original $100 cost. Now I need to recapture some of the expense I wrote off in the past.
In Part I, Line 2, there is a drop down box labeled, "Type of Property Code," with the following choices:
A = Section 1231
D = Section 1252
E = Section 1254
F = Section 1255
G = Capital Asset
H = Ordinary Income Asset
None of the "Section" property types seem to apply since this wasn't a depreciable asset. I chose "Ordinary Income Asset," but that wants to recapture $75 in ordinary income in Part II, Line 10, of Form 4797. I only need to recapture $25, not $75. It seems like TT is doing the calculation wrong.
Basic question is how to recapture something you previously expensed?
