expense of sale

[POCAHONTAS]

new client

Truck driver discontinued his trucking business in 2007 and sold his 2000 Peterbilt truck on 4/4/2008,
so since he had discontinued his business in 2007 there would be no depreciation in 2008 but how would I figure the expense of sale ???
thanks

[Burke]

Not sure I am following where you are going with this. The expense of sale would be included in the calculation of gain/loss on 4797 along with the depreciation recapture if any. Is that what you are talking about? What selling expense is there?

[POCAHONTAS]

yes sir that is correct so sorry, I should have been more specific

Purchased truck in 2005 for $56,750
depreciation taken $37,342
sale proceeds $33,240

in this case what would be expense of sale if any??
thanks

[taxcraft]

Depreciation

Was a half year of MACRS depreciation taken during the year of sale?

[BOB W]

Advertising, commissions, travel... anything that it took to sell the tractor out of pocket.

[POCAHONTAS]

Was a half year of MACRS depreciation taken during the year of sale?

no the business had ended in 2007, and depreciation was MQbut the truck was sold in 2008

[POCAHONTAS]

thanks Bob W

[POCAHONTAS]

office leasehold

this is off the subject but the client also had an office leasehold which was also depreciated MM S/L would there be any tax consequences for the leasehold after the close of business??
thanks

[BOB W]

The unamoritized amount would be written off.

[POCAHONTAS]

it would be written off in the year the business was closed right?? and would it be the same for the other assets which were also being depreciated??
thanks

[BOB W]

Yes for the amoritization.. As for depreciable assets, how it was disposed of will determine how it is REMOVED from the books. Each issue happens in the year it ceases to be a business entity or the year of sale of the asset.

[POCAHONTAS]

thank you for your help

[POCAHONTAS]

Bob W

If the last year of the business amortization wasn't written off, and the truck was sold the following year would you recapture all of the amortization that should have been written off or only what was written off in the prior years??

thanks

[BOB W]

Bob W

If the last year of the business amortization wasn't written off, and the truck was sold the following year would you recapture all of the amortization that should have been written off or only what was written off in the prior years??

thanks

Right or wrong I would finalized all in the most current filing year.

[POCAHONTAS]

Yes for the amoritization.. As for depreciable assets, how it was disposed of will determine how it is REMOVED from the books. Each issue happens in the year it ceases to be a business entity or the year of sale of the asset.

Bob W

just wanted to make sure I understood, so the amortization would be written off for the office leasehold and the truck and all other assets or just the office leasehold.

when the depreciable assets are sold then the basis would be zero for all assets I think I am confused???

thanks