Schedule C questions

[msa620001]

I'm moving to TT for 2022 after using an expensive CPA for many years and have a couple of questions. 

We have a small business that has been reported on Schedule C, generating mostly losses for a number of years.  The business was wound down in 2022 (but will not be fully closed for a couple more years).  My questions:

- During 2022 we sold most of the business' capital equipment.  We have depreciated basis for larger equipment that was sold, but not for a number of smaller items.  What should we do for these items, which were sold for well below what we paid?  I'm not worried about missing the loss...just don't want to do something "wrong" here.

- I'm trying to get my head around the investment we made in the business over the years to fund operating losses and the capital investment.  My thinking is that the investment is captured in our return.  The losses that we took on the 1040 via Schedule C capture the investment in the operating side of the business, and the capital losses/gains we'll reflect from sale of the assets will capture what we put in to fund capital side of the business.  Am I missing anything here?

- The business will generate a small profit in 2022, and I may need to make an unexpected estimated payment early in 2023.  Does TT have some sort of simple estimator available that I could use to assess whether we'd need to make an estimated payment in January, or should I go ahead and buy the 2022 TT software and use it to make the estimate?

Thanks.

[Critter-3]

- During 2022 we sold most of the business' capital equipment.  We have depreciated basis for larger equipment that was sold, but not for a number of smaller items.  What should we do for these items, which were sold for well below what we paid?  I'm not worried about missing the loss...just don't want to do something "wrong" here.   Items that were not depreciated (and listed as assets on the depreciation worksheet ... make sure you have it from the CPA)   were simply expensed so anything you get from selling them is just entered as ordinary business income. 

- I'm trying to get my head around the investment we made in the business over the years to fund operating losses and the capital investment.  My thinking is that the investment is captured in our return.  The losses that we took on the 1040 via Schedule C capture the investment in the operating side of the business, and the capital losses/gains we'll reflect from sale of the assets will capture what we put in to fund capital side of the business.  Am I missing anything here?   On a Sch C you don't have basis like you would in a corporation.  If you "loaned" money to the business you should have been "repaying" yourself along the way ... nothing is deductible on that now.   The money you put in the business was used to pay for something which was either deducted from the business income as an expense or depreciated ... that is how it is handled.

- The business will generate a small profit in 2022, and I may need to make an unexpected estimated payment early in 2023.  Does TT have some sort of simple estimator available that I could use to assess whether we'd need to make an estimated payment in January, or should I go ahead and buy the 2022 TT software and use it to make the estimate?   Usually you use the prior year tax program to figure estimated payments  for the next tax year ... however you can try the taxcaster tool ... 

One option is to use TurboTaxes TaxCaster to estimate the amount of your refund and adjust your withholding to reduce the refund and increase your take home pay.  

[msa620001]

Very helpful...thank you.

[msa620001]

I'm still engaged with my CPA, and shared with him what I calculated for an estimated payment we'd need to make in January.  He responded by pointing out that proceeds from all the property we sold will be taxed at ordinary income rates (but no self employment tax) because the assets were all "section 1245 property", and we received deductions (either expense or depreciation) as we purchased/owned them, and now the IRS will receive parity on treatment when they're sold.  This makes sense to me, but wanted to see if this is a nuance that TurboTax would pick up for me.  I assume it would...the program would "know" that assets acquired in a Schedule C business would have generated ordinary income deductions when acquired, and should be taxed at these same rates when sold.  And I assume that TT would not apply the self employment tax.  

Can someone verify this?  Thanks!

[Anonymous_]

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@msa620001 wrote:

Can someone verify this? 

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Yes, TurboTax can handle the scenario you described after you enter your business assets into the program (using Home & Business or Self-Employed).