Theft and Replacement In Same Year

[geekgirldany]

Client had theft of multiple pieces of equipment. All had been Section 179 in prior years. They received a reimbursement for the equipment, about $3,000 and purchased new equipment as replacement.

From my understanding a Form 4684 is not needed if the replacement happened in the same year... but a statement has to be included.

My problem is that I can not break down the $3,000 to particular pieces of equipment that was stolen. I have a list of what was stolen but the insurance did not and seems will not provide how this $3,000 was broke down to each piece of equipment.

Question is, can the stolen equipment be lumped together into one transaction and reported on the statement that way?

Thanks for any help.

[geekgirldany]

Any takers on this one? I've seen that many have looked at it.

It has been a long time since I've dealt with a situation like this. Would appreciate any help.

[rtsietsema]

Pro rate?

Maybe look at the original basis of each item, and create a percentage of the whole original basis for each item. Then apply it to the $3,000 to create the insurance cost for each item.

The problem I see with treating these as a group, is the day one of the items is taken out of service.

It's a thought anyway!

[BHoffman]

Client had theft of multiple pieces of equipment. All had been Section 179 in prior years. They received a reimbursement for the equipment, about $3,000 and purchased new equipment as replacement.

From my understanding a Form 4684 is not needed if the replacement happened in the same year... but a statement has to be included.

My problem is that I can not break down the $3,000 to particular pieces of equipment that was stolen. I have a list of what was stolen but the insurance did not and seems will not provide how this $3,000 was broke down to each piece of equipment.

Question is, can the stolen equipment be lumped together into one transaction and reported on the statement that way?

Thanks for any help.

Hi Dany - I think you can use a "reasonable" method to make an allocation between the separate pieces of equipment. I generally use the "relative" method.

Let's say:

Equip #1 cost $2000
Equip #2 cost $1000
Equip #3 cost $3000

2000+1000+3000 = 6000

Equip #1: 2000/6000 = 34% x $3000 insurance reimb = $1020 allocated to Equip #1
Equip #2: 1000/6000 = 16% x $3000 insurance reimb = $840 allocated to Equip #2
Equip #3: 3000/6000 = 50% x $3000 insurance reimb = $1500 allocated to Equip #3

[taxea]

Maybe look at the original basis of each item, and create a percentage of the whole original basis for each item. Then apply it to the $3,000 to create the insurance cost for each item.

The problem I see with treating these as a group, is the day one of the items is taken out of service.

It's a thought anyway!

this is what I would do. You need to take the items out of service and deal with the 179 taken. Then put the new equipment into service. Also I would think that the insurance company would have required the client to provide a detailed list. Or the police report should have an itemized list with values for each item.

[geekgirldany]

Thank you both for replying. I believe this will be my only option.