how to deduct a not fully depreciated replaced on a property rental

[bosterman]

I have replaced a  air conditioning unit on my rental property, which it was not  fully depreciated. BTW my rentals are in a Corporation C, so I do not itemized. Should I report it as a  zero sale or deduct it as business expense. Also please tell me what forms to use. Thank you.

[JohnB5677]

A rental property should be on a schedule E.  If it is not it will cause problems down the line.  You can set up a Schedule C for management control, but the properties themselves should be on a Schedule E.

If the original air conditioner was not fully depreciated you will have to dispose of it as an asset.  You will post the final value as zero and the reminder of the depreciation will flow into your return.

The replacement air conditioner should be setup as a new asset.

[bosterman]

Hi John:

Thank you, although I am not sure these forms apply to my 1120 corporation tax return. Anyway, I understand that I have to zero sell the replaced air conditioner , but do not know what forms are the right ones.

tks

[dvallee40]

Hello,

just curious on this.  Where (what schedule) do you post the value as 0.  Does this get reported on Form 4797 as a sale with a value of 0?

regards 

[Mike9241]

just delete it since there was no sale

[Critter-3]

@bosterman

YES ... sell the asset for ZERO to (1) get it off your depreciation worksheet and (2) get the balance of the cost basis on the return. 

[Carl]

I think @JohnB5677 may have mis-read your post.

Your rental is in a C-Corp. Therefore, SCH E is not used with the 1120 return.

Simplest thing to do is to report the asset sold for $0.  That will automatically deduct the remaining depreciation and reduce the overall cost basis total of all of your remaining assets.

[dvallee40]

Mine is a sole proprietorship  

[tagteam]

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@dvallee40 wrote:

Mine is a sole proprietorship  

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As mentioned earlier, it gets reported on Form 4797 with the sales price as zero ($0).

[dvallee40]

Ok thanks so much