Conversion of Asset to Personal Use

[equinecpa]

I have a client who is discontinuing his business as of 12/31/17.

I have a couple of questions on depreciation and losses on assets that remain in the business:

He can claim a full year of depreciation on the assets can't he? He operated the business through closing on 12/31/17. So technically the assets get converted to personal use 01/01/18 ( I wouldn't claim any depreciation in 2018).

Losses on sales of assets in 2018. If he sells an asset at a loss in 2018 is the loss deductible as a business loss? I've read conflicting statements on this.

[taxea]

If he (properly) converts the assets to personal use at end of year close of business then anything sold in 2018 would be a personal sale.

[TAX4US]

I would be more concerned with the basis coming out and a sale in a later year. Could there be unexpected gain?

[TAXNJ]

I have a client who is discontinuing his business as of 12/31/17.

I have a couple of questions on depreciation and losses on assets that remain in the business:

He can claim a full year of depreciation on the assets can't he? He operated the business through closing on 12/31/17. So technically the assets get converted to personal use 01/01/18 ( I wouldn't claim any depreciation in 2018).

Losses on sales of assets in 2018. If he sells an asset at a loss in 2018 is the loss deductible as a business loss? I've read conflicting statements on this.

You don't say what type of business structure. Property tax basis carries over (recapture may be involved).
You might consider to start looking at Reg. Section 1.168(i)-4(c)

Also a prior TTB post:

http://forum.thetaxbook.com/archive/index.php/t-19744.html

Your 11-5-08 post involved conversion.

http://forum.thetaxbook.com/showthread.php?9946-Converting-assets-from-S-corp-to-personal-business&p=67917#post67917

[equinecpa]

That one was an s corporation this is a sole proprietorship, very different IMO.

[TAXNJ]

That one was an s corporation this is a sole proprietorship, very different IMO.

Yes, thought maybe your research might have covered the subject. What happened to the assets when you said
...."S corporation with the remaining division for a couple of more years and then it will be dissolved, so this is not a complete liquidation." ?