Transfer from Fixed Assets to Inventory

[TaxBird]

I have a client (1120) who has found it more lucrative to convert it's repair business to an equipment resale business. As a result, they have put their previous fixed assets up for sale and continue to acquire and resell this kind of equipment.

My question revolves around how to treat the sale of former fixed assets? Do normal sale rules apply (Cost-NBV = Gain/Loss, reporting on Form 4797) or is there more to it?

Any advise and/or reference citations would be greatly appreciated.

Thank you in advance

[ChEAr$]

I have a client (1120) who has found it more lucrative to convert it's repair business to an equipment resale business. As a result, they have put their previous fixed assets up for sale and continue to acquire and resell this kind of equipment.

My question revolves around how to treat the sale of former fixed assets? Do normal sale rules apply (Cost-NBV = Gain/Loss, reporting on Form 4797) or is there more to it?

Any advise and/or reference citations would be greatly appreciated.

Thank you in advance

From what you say, the corporation will be buying other used equipment and selling those items too, thus maintaining an inventory. Well and good.

But for previously used assets in the business, I would not bother with an accounting entry transferring book value into inventory. just treat any future sales of these segregated items on form 4797.

6 of one; half dozen of the other.

[TaxBird]

Thanks Harlan

It seemed so simple that I wanted to make sure I wasn't missing something.