Basis of asset

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  • gman
    Senior Member
    • Dec 2005
    • 676

    #1

    Basis of asset

    Trade in a piece of equipment with an adjusted basis of 0 for a piece of equipment with a fmv of 30,000. Trade even -no cash boot.
    The basis of the new equipment would be O, right??
    How do you list that on your depreciation schedule.

    New asset-- 0 basis
    would you list the 30,000 cost anywhere?

    thank you
  • mactoolsix
    Senior Member
    • Apr 2009
    • 544

    #2
    Realized Gain = 30,000
    Recognized gain = zero

    Basis of Acquired Property is:
    Recog. Gain
    Plus Adj Basis given zero
    Plus Boot given zero
    Minus Boot received zero

    = basis of acquired property

    Form 8824

    OOPS - I didn't mention the 30,000 will become a deferred gain om form 8824
    Mike
    Last edited by mactoolsix; 02-14-2013, 08:12 PM.

    Comment

    • TAX4US
      Senior Member
      • Mar 2010
      • 551

      #3
      Just for tracking I have seen on dep worksheets an item labeled deferred gain-tractor. amount put in and set as non depreciable. So that new asset has a tracking and depending on later on if tp does something with it you know where to start.

      Comment

      • gman
        Senior Member
        • Dec 2005
        • 676

        #4
        So adjusted

        so the adjusted basis of the new item is 0?

        Comment

        • mactoolsix
          Senior Member
          • Apr 2009
          • 544

          #5
          Let me check my math . . .

          Originally posted by gman
          so the adjusted basis of the new item is 0?
          0 + 0 + 0 - 0 = 0

          Yep - New adjusted basis = 0

          However, as TAX4US notes: for tracking enter a depreciation, of an item labeled deferred gain-tractor, amount put in and set as non depreciable. This will help you if & when a final sale occurs - he isn't excluding the gain, he has deferred it.

          Hope that helps,
          Mike

          Comment

          • gman
            Senior Member
            • Dec 2005
            • 676

            #6
            30,000 value

            Would you include the 30,000 anywhere on your depr schedule. My client would like to have it on there that the value of the item was 30,000. (for his records-when he looks back in a couple of years) but I do not think my software allows that. How do you record it. I show the asset with a 0 cost and basis. For record keeping -not actually deducting it.

            Comment

            • WhiteOleander
              Senior Member
              • Jun 2005
              • 1370

              #7
              Maybe you could enter it in and show 30000 as prior depr taken.
              You have the right to remain silent. Anything you say will be misquoted, then used against you.

              Comment

              • BOB W
                Senior Member
                • Jun 2005
                • 4061

                #8
                Originally posted by WhiteOleander
                Maybe you could enter it in and show 30000 as prior depr taken.

                This is what I would do......................
                This post is for discussion purposes only and should be verified with other sources before actual use.

                Many times I post additional info on the post, Click on "message board" for updated content.

                Comment

                • mactoolsix
                  Senior Member
                  • Apr 2009
                  • 544

                  #9
                  Originally posted by gman
                  Would you include the 30,000 anywhere on your depr schedule. My client would like to have it on there that the value of the item was 30,000. (for his records-when he looks back in a couple of years) but I do not think my software allows that. How do you record it. I show the asset with a 0 cost and basis. For record keeping -not actually deducting it.
                  It will show up on Form 8824 Line 16 FMV of property received

                  Mike

                  Comment

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