sole propriator, business shut down?

[jdoub55]

In 2020 I shut down my business , then in 2024 I sold a old machine from it for $23000.00

I had bought it while in business payed over $41000.00 for it, so lost $$ on it.

Do I owe taxes?

Should I report the sale?

And if so how do I go about it with turbo tax?

Let me know

Joe

[DianeW777]

Yes, you need to report the sale. Any depreciable assets must retain tax records even when the business shuts down.  A sale or trade will always be a taxable event. If there is a gain taxes may increase, if there is a loss taxes may decrease.

Report the machine as follows and have your previous depreciation expense totaled from prior year returns.  If there has been personal use since the business closed, you must calculate business use days and days used for business to arrive at the business use percentage.

Sale of Business Property:

1. Income and Expenses at the top
2. Scroll down to Other Business Situations
3. Select Sale of Business Property
4. Select Sales of business or rental property that you haven't already reported.
5. Answer 'Yes' to Do all of the following apply...?
6. Enter your sales information:
   1. Description of the Property (Machine Type)
   2. Sales Price/Sales Expenses 
   3. Date acquired and date sold
   4. Cost
   5. Depreciation

[jdoub55]

Hi Diane

Still working on it, I put in the asset like you said..

I was surprised to owe taxes on this asset?

my gross sales price  $23000.00

Cost of asset payed   $42448.00

Depreciation taken    $41669.00

Adjust Basis                      $779.00

total gain                      $22221.00

taxed                             $ 2303.00

If I entered things correctly? 

[jdoub55]

Hi Diane

Thank you for the help!

I guess it was because of all the deprecating the equipment that I owed  the taxes.

Your helpful insight did help me to save $$ in being able to do this on my own.

Your Email , helped me to run right thru the menu's and do the calculations, I was still

in the calculation mode when I replied.

Thank you again!

Your friend.

Joe D.