topic Recapture of Sec 179 and depreciation in Self employed

Recapture of Sec 179 and depreciation

pakikiheiya — Sat, 23 Mar 2019 20:44:51 GMT

Help ! I bought a truck in 1/1985 and used it 60% in my farm business. Claimed Sec. 179 deduction the first year and ACRS depreciation the remaining 3 years. The truck is totally depreciated. In 2018 decided NOT to use it in my business (requires too many repairs).

Tried to report it on TurboTax as non-use, but it gave me CONFUSING info, for example what MACRS convention did I use. I used ACRS originally! What would be the answer?

The truck's info was inputted years ago. How come TurboTax cannot determine that the truck is fully depreciated, etc? How do I specifically report it on TurboTax and do I have to recapture ALL the Sec. 179 deduction and depreciation?

Please reply as soon as you can. Thanks

Re: Recapture of Sec 179 and depreciation

LudwigVan_fan — Sat, 25 May 2019 18:05:33 GMT

As I understand your question; you bought the truck in 1985 (34 years ago). Used ACRS and some 179 deduction. Business use is fully depreciated. You have NOT sold the truck. I don't think you have any recapture. After all this time, recapture should only be an issue if you received value (money or property) for the truck. Then that would be allocated between the business and personal (not depreciated portion).

Re: Recapture of Sec 179 and depreciation

pakikiheiya — Sat, 25 May 2019 23:35:49 GMT

Super LudwigVan_fan

Thank you for responding in a timely manner. Apologize for not relying earlier. Just discovered the change from AnswerX to Real Money Talk site.

If I understand you correctly, since my truck is fully depreciated, I am NOT selling it and just disposing of it, I don't have to recapture anything.

Do I have to report the disposition of my truck anywhere on my tax return?

I await your valuable info. Thank you.

Re: Recapture of Sec 179 and depreciation

LudwigVan_fan — Sun, 26 May 2019 16:09:31 GMT

@pakikiheiya

No, you don't have to report it anywhere on your tax return. There is no tax effect on the disposition since there is no transaction of receiving anything of value on the disposition.

All you really have to do if you are just disposing of it (junking it?), is remove it from your depreciation schedule and/or balance sheet.

As long as your received nothing of value, there is no taxable transaction.

Re: Recapture of Sec 179 and depreciation

pakikiheiya — Mon, 27 May 2019 00:13:51 GMT

Super LudwigVan_fan,

Thank you for replying again in a timely manner and taking the time to explain your valuable info !

I will apply your suggestion. Thanks again.