Basis of asset

[gman]

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]

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

[TAX4US]

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.

[gman]

So adjusted

so the adjusted basis of the new item is 0?

[mactoolsix]

Let me check my math . . .

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

[gman]

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.

[WhiteOleander]

Maybe you could enter it in and show 30000 as prior depr taken.

[BOB W]

Maybe you could enter it in and show 30000 as prior depr taken.

This is what I would do......................

[mactoolsix]

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