Discussion:Is this a taxable transaction
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| Revision as of 01:26, 4 April 2007 Dennis (Talk | contribs) ← Previous diff |
Revision as of 02:39, 4 April 2007 DR BRISKET (Talk | contribs) (Dennis, thanks f) Next diff → |
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| {{ForumReplyPost|UserID=Dennis|Date=3 April 2007|Text=I vote 14,900 §179 recapture 5,600 §1245 gain 2,500 §1231 gain. ♫}} | {{ForumReplyPost|UserID=Dennis|Date=3 April 2007|Text=I vote 14,900 §179 recapture 5,600 §1245 gain 2,500 §1231 gain. ♫}} | ||
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| + | {{ForumReplyPost|UserID=DR BRISKET|Date=4 April 2007|Text=Dennis, thanks for your input. Using your approach, am I correct in saying the $7,500 replacement van would have zero basis? }} | ||
Revision as of 02:39, 4 April 2007
Discussion Forum Index --> Tax Questions --> Is this a taxable transaction
DR BRISKET (talk|edits) said: | 3 April 2007 |
| Hello, forum members. I'm needing some help here. Its way too late in the season, and my brain is about drained!! In 2005, sole proprietor purchased a heavy van for $28,000. Sec 179 for full $28K was claimed on '05 return. A loan was taken out on this van. In 2006, when loan was down to $25,000, client sold this van for $23,000 to an individual. In addition, this individual gave my client another service van worth about $7,500. My client paid off the loan using the $23,000 plus $2,000 of his own money. When the dust settled, my client was out from underneath the bank loan for his old expensive van. In its place, he has a smaller van worth $7,500. Plus, a Section 179 was taken for $28K on the van he got rid of. Please advise how such a set of transactions needs to be handled. Thanks. | |
| 3 April 2007 | |
| I would say do an 8824 tax free exchange on new service van. You end up with 0 basis in new van. Now the bad news. Recapture 20,500 of 179 depreciation. | |
Rgtaxservice (talk|edits) said: | 3 April 2007 |
| From the hip I'd say the exchange results in a zero basis in the new van and a recapture of 15500 minus the 05 depreciation and any 06 depr prior to sale. You need only recapture the unused sec 179, not all of it. | |
| 3 April 2007 | |
| Willy can do this in his head...I can't anymore. On a straight cash basis there is 30,500 for 28,000 so §1231 comes into play. Listed so A/D is what 5,600? | |
| 3 April 2007 | |
| I vote 14,900 §179 recapture 5,600 §1245 gain 2,500 §1231 gain. ♫ | |
DR BRISKET (talk|edits) said: | 4 April 2007 |
| Dennis, thanks for your input. Using your approach, am I correct in saying the $7,500 replacement van would have zero basis? | |
