New client filed schedule C in previous years for a rodeo roping business. Previous CPA depreciated two horses, barn built in 2004 for $82,000 and a list of other pieces of equipment. Client sold property that had primary residence and barn in 2006. He ended his rodeo roping business at the end of 2005. So, my questions are:
1. The barn would need to be reported on 4797 as a sale of business property and client would need to provide the FMV of barn at date of sale of property - correct??
2. One of the horses died and client still has the other horse. Would the horse that died be reported as a loss as not fully depreciated? If second horse was depreciated by MACRS 200DB, would a portion need to be recaptured being horse is no longer being used as a business asset?
3. Other pieces of equipment that client still owns, but no longer uses as business assets - are they just taken out of depreciation being they have not been disposed of or sold or does recapture of depreciation need to be applied in year that they are no longer used as business assets?
1. The barn would need to be reported on 4797 as a sale of business property and client would need to provide the FMV of barn at date of sale of property - correct??
2. One of the horses died and client still has the other horse. Would the horse that died be reported as a loss as not fully depreciated? If second horse was depreciated by MACRS 200DB, would a portion need to be recaptured being horse is no longer being used as a business asset?
3. Other pieces of equipment that client still owns, but no longer uses as business assets - are they just taken out of depreciation being they have not been disposed of or sold or does recapture of depreciation need to be applied in year that they are no longer used as business assets?
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