Sold a business asset that was being used as rental. Sale price was below loan balance. Can any of that difference be deducted? Asset was fully depreciated.

[JulieR · Accepted solution]

No. The mortgage balance/debt on the property has no bearing on the calculation of gain or loss when the asset is sold.

When selling a business asset, your gain or loss on the sale is calculated by adjusting the asset's original cost basis by reducing it by the depreciation taken. 

Example:

1. Original cost                                               $285,000
2. Depreciation taken                                     $  85,000
   
3. Adjusted basis                                            $200,000
4. Sale Price                                                   $300,000
5. Capital Gain                                               $100,000