I have a sole propietor that sold his business assets on 7/31/05. He has a few business assets that he kept for personal use. One is a truck that he purchased on 11/29/04 and used 100% business in 2004. He took the total cost of $3500 as section 179 expense in 2004. In 2005 he used it 100% business until he sold the business on 7/31/05 at which time the vehicle became 100% personal use. I use Turbo Tax Proseries. I am trying to figure out how to correctly account for this truck. It wasn't disposed of on 7/31/05, just converted. I read somthing that you don't have to recapture section 179 if you gift the item. Can I consider it a gift? I know the tax book says if business use falls below 50% I would need to recapture the Section 179 expense but the use is over 50% in 2005 and next year their won't be any business. Also, if I do need to recapture section 179 as ordinary income, do I have to include on Schedule C for SE tax. The other assets that were sold with the business are showing section 1231 gains but it goes on line 14 of 1040 not line 6 of schedule C. I would really appreciate any help. Thanks
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