Enter conversion of despreciable asset to personal use in TT - Form 1065

wrnoof — Thu, 26 Feb 2026 20:10:24 GMT

My wife and I are partners/members of a partnership/LLC that owns a charter sailboat. The boat was in charter from October 2021 until July 2025. Relevant details are:

The boat was based in Tortola, British Virgin Islands. Therefore, ADS must be used to calculate depreciation.
The boat is not qualified property because ADS is required.
The boat is listed property because a boat provides transportation and, perhaps, entertainment.
We use "Z Other" as the Asset Type.
We use "00.28", "Vessels" as the Asset Class and 18 year, straight line, mid-quarter depreciation.

We terminated our contract with the charter management company in May 2025 and sailed the boat to Annapolis arriving on June 30. We flew home to Colorado on July 3. As we were interested in keeping the boat in charter until we had to return home, we have designated July 3 as the conversion-to-personal-use date. The boat has been listed for sale since sometime in 2024.

How do we use TT business to report the conversion to personal use? The Disposition section of the Asset Entry Worksheet allows entry of a disposition date and the annual depreciation appears to be pro rated correctly. However, entering $0 as the sales price and sales expense results in a very large Asset Loss, which is not true since the boat has not sold, yet. Some advice on how to enter this information in TT is needed.

Re: Enter conversion of despreciable asset to personal use in TT - Form 1065

RobertB4444 — Thu, 26 Feb 2026 21:23:59 GMT

You're going to use "given away" as of the date that it was converted to personal use and then it will be removed from the return. You will have to add it back in for the sale.

Re: Enter conversion of despreciable asset to personal use in TT - Form 1065

wrnoof — Mon, 02 Mar 2026 18:12:19 GMT

Thanks for pointing that out. I've been living exclusively in the forms and missed that option. I now know step-by-step may offer something not available in the forms.

topic Enter conversion of despreciable asset to personal use in TT - Form 1065 in Business & farm

Enter conversion of despreciable asset to personal use in TT - Form 1065

Re: Enter conversion of despreciable asset to personal use in TT - Form 1065

Re: Enter conversion of despreciable asset to personal use in TT - Form 1065