selling a business asset

[danielle-51]

We are a small family business, an LLC taxed as a partnership.

We are intending to sell a piece of equipment in order to buy a new one.

Once the older one is sold, do we count that as income? and then when the new one is bought, do we count that as an expense (using section 179)?

The one we are selling has already been fully depreciated.

I wasn't sure if I am thinking about this correctly.

I know this would be a common occurrence, and am sure there is a simple way of accounting for it.

Thanks!

[Mike9241]

you report the sales price or trade-in value given as the sales price. Since the asset is fully depreciated this will result in section 1245 depreciation recapture equal to the sales price/trade-in value. If this is more than its cost, any excess is capital gain. all yo should eed to do is enter date odf sale and sales price and Turbotax should take care of reporting the sale inclusing any gain - you'll see the gain on form 4797 page 2. 

you record the new asst for what you paid for it, any discount for the trade-in would be ignored. yes the full cost should be eligible for section 179 or 100% special depreciation.  the only difference is that 179 can get limited by business income not so for special depreciation.