Disposition of Business Property

[Academy Tax]

Client started LLC insurance business January 1, 2014 and placed office furniture and computer equipment items in service at same time. Client recognized business not viable due to excessive competition and ceased operating prior to December 31, 2014. Office furniture and computer equipment in service less than 1 year, but not yet disposed of. Property doesn't seem to meet requirements for depreciation in 2014, yet there must necessarily be some reconciliation in 2015, probably form 1040/schedule C.

Regulations don't seem to cover reporting this somewhat unusual situation. Suggestions from more senior tax preparers appreciated.
Ron

[ATSMAN]

Did the LLC have any income?

If it is 0, file a final 1065.

What are they going to do with the office furniture and computer? If it is brand new and they may want to use it for personal use. I would not even put it on the business books. That way you don't have to worry about disposition issues later on.

[Academy Tax]

Thank you for the reply. 1065 seems unrelated to LLC?? I haven't yet seen his books yet, but suspect the year will result in a loss. I understood he would sell the furniture, presumably the computer equip too.

Ron

[ACCURATETAX]

It will be a Schedule c if its a sole owner not a partnership Id just leave off the furniture and not depreciate it no 1065 is needed