If taxpayer closes business and converts business property (equipment) that had been 179'd to personal use, does a portion of the 179'd deduction need to be recaptured?
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From TTB
Section 179 Recapture
A portion of the Section 179 expense must be recaptured as ordinary
income if business use of property falls to 50% or less in
any year during the regular MACRS recovery period. In the year
business use drops to 50% or less, include the recapture amount
as ordinary income in Part IV of Form 4797, Sales of Business Property.
The recaptured amount is then reported as “Other Income”
on the same form or schedule on which the original deduction
was claimed.
Note: If property is sold, exchanged, or otherwise disposed of, do
not figure the recapture amount under the rules explained in this
section. Instead, see depreciation recapture—sale of business or
investment property in Tab 6.
Recapture amount.
1) Figure depreciation that would have been allowable on the
property under regular MACRS. Begin with the year the property
was placed in service and include the year of recapture.
2) Subtract the depreciation in (1) from the Section 179 deduction
actually claimed. The result is the recapture amount.
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