Thank you for the article. Following it, and using the facts I gave in my original question,
1) Basis on conversion date under normal rule, $33,000
2) FMV on conversion date, $28,000
3) Post conversion depreciation deductions, $28,000
4) Basis for tax loss (line 2 - line 3), $0 (zero)
5) Basis for tax gain (line 1 - line 3, $5,000
6) Net sale price after selling expenses, $20,000
7) Tax loss (excess of line 4 over line 6), N/A, no excess
😎 Tax gain (excess of line 6 over line 5), $15000
So I report a cost basis of $5000 using original purchase price of $33000 less depreciation taken of $28000 and pay tax on gain of $15000 on the 2019 sale of the machine for a price of $20000. Does it look like I understand this correctly? thanks again.
