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Deceased Musician's Instrument

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    #1

    Deceased Musician's Instrument

    We've been discussing this situation in our office....

    Musician died. His instrument was being depreciated.

    The wife inherited the instrument (stepped up basis) and after some time sells it. (Pays a sales commission in the process.) This generates a loss.

    Do we consider this a business sale or sale of a personal asset?

    Any thoughts would be greatly appreciated.
    Tags: None
    #2
    I think you answered your own question.

    Originally posted by Cheryl48 View Post
    We've been discussing this situation in our office....

    Musician died. His instrument was being depreciated.

    The wife inherited the instrument (stepped up basis) and after some time sells it. (Pays a sales commission in the process.) This generates a loss.

    Do we consider this a business sale or sale of a personal asset?

    Any thoughts would be greatly appreciated.
    You said she inherited the instrument at FMV. Go from there.
    ChEAr$,
    Harlan Lunsford, EA n LA

    Comment

      #3
      In other words. Sale of personal item = no loss.

      You cannot have it both ways. If this could be considered a business sale in winding down his affairs then you have to recover depreciation.

      Comment

        #4
        Originally posted by Cheryl48 View Post
        We've been discussing this situation in our office....

        Musician died. His instrument was being depreciated.

        The wife inherited the instrument (stepped up basis) and after some time sells it. (Pays a sales commission in the process.) This generates a loss.

        Do we consider this a business sale or sale of a personal asset?

        Any thoughts would be greatly appreciated.
        Just a thought - It may considered investment property. If the wife had no business or personal use for the instrument, I would probably take the loss.

        Comment

          #5
          Unless

          Originally posted by Larmil View Post
          Just a thought - It may considered investment property. If the wife had no business or personal use for the instrument, I would probably take the loss.
          the instrument was an heirloom, antique, valuable in it's own right, it would not be
          an investment.
          ChEAr$,
          Harlan Lunsford, EA n LA

          Comment

            #6
            Deceased Musician's Instrument

            Originally posted by ChEAr$ View Post
            the instrument was an heirloom, antique, valuable in it's own right, it would not be
            an investment.
            The instrument was purchased used and by a working musician.... definitely not an antique or heirloom.

            Comment

              #7
              Personal property

              It is personal property with a stepped up basis. Tax on gain. No loss.

              Comment

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