That scenario should result in the same basis for depreciation purposes so it should be allowable.
That scenario should result in the same basis for depreciation purposes so it should be allowable.
OK, so how exactly do I do this? I have a handle on disposing of an asset, but this asset is being transferred. Do I used the original sales price as the basis on the 2nd business and then record the depreciation already taken? This is a 5 year asset with 3 years left, how do get this entered in correctly? I entered the original sales price as the basis, but when I entered "prior depreciation", it lit up as an error. Thanks
Yes, you do add the asset at the original date placed in service and original cost. Because the asset is being used by a related party it retains it's character for your second business. Be sure you are using the correct date placed in service (original date) this way TurboTax will calculate the correct prior and current depreciation.
Please update if you have more questions.
Well, when I close out the asset on Schedule F, it then shows a loss of $12797 ($33,800 basis minus depreciation from '20, '21, and 1/1/22 to 5/1/22.) when I use "0" as the sale price. Would it be alright to show the asset as sold for $12797 on 5/1/22 on Schedule F, and then bring it over to the other business on 5/2/22, use $12797 as the basis, and finalize depreciation over another 5 years just like it had been sold to another business?
The character is retained using your method. Yes, that is a good way to look the issue. You are keeping the basis in place that way. Perfect!