Like-Kind exchange

Forum|Forum|5 years ago
April 1, 2021
3 replies
30 views

Hi,

I exchanged on old cell phone that I was depreciating on my depreciation tables (it wasn't depreciated out), and I thought I was supposed to do it through a like-kind exchange. However, I discovered that that can't possibly be true. How do I get rid of a cell phone that I exchanged and add the new cell phone in to my depreciation tables?

Cynthiad66

Level 14

You disposed of an asset for business purposes.

Using your last years depreciation report you can re-enter all of your business assets whether fully depreciated or not. You are required to maintain this Business Asset Summary list until you report how they were disposed of---so don't just delete the asset because it is fully depreciated. You may still be liable for recaptured depreciation when you dispose of the asset from your business. You report how you disposed of all business assets (in the year they were disposed of) by Editing each asset in your Business Asset Summary list in TurboTax as sold, converted to personal use, etc. Per @Cattlerancher

Use this link for additional details: Publication 544 - Disposition of Assets

However, a cell phone can be written off entirely in the year of purchase if used for business.

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stufordkmAuthor

Level 3

Thank you! Yes, that is what I did. I treated them as two separate transactions and put the business amount we received from the sale of the first phone. I assume that Turbo Tax will take it from there if we owe anything back, as we took like the whole allowable amount that first year.

AmyC

Level 15

Yes, if you wrote off the whole phone then you may have some depreciation recapture in your return. When it asked about depreciation, you would have answered the full price was depreciated and the program would go from there.

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