Sale of Business Property

[skhyatt]

Can someone tell me where in TTB does it discuss dividing up the basis and selling price of property according to business use percentage? I have looked and looked and cannot find anything. For example, without considering any depreciation, Selling price of item is $10000, cost is $5000. Business use percentage is 60%. Selling price allocated to business use would be $6000 and cost would be $3000.

[Golden Rocket]

Don't Know

SK, I can't find it either.

I think the Tax Book assumes a certain level of expertise among practitioners, and with space at a premium, does not spell out the obvious. The discussion in the book leaves little doubt that the business assets are reported as a gain (or loss) on Form 4797, and personal asset gains (but not losses) are reported on Schedule D.

You may have intended to ask what happens when the personal percentage changes during the life of the asset. Maybe Bees Knees could better address that.

[Brad Imsdahl]

Sale of business property is discussed on page 6-12. It does not give an example of when the property was used partially for personal purposes.

Sale of an auto is discussed on page 10-10. Since autos are the more common example of property used partially for business and partially for personal, it has an example of how to calculate gain.

Trade-in of an auto used partially for business and partially for personal is discussed on page 10-9 with an example.

Sale of business (along with the sale of its assets) is discussed on page 25-2. It does not give an example of when the property was used partially for personal purposes.

A discussion of mixed use property and how to allocate expenses as it relates to real estate rentals is discussed on page 7-7, however, it does not go into what happens when it is sold.

Advertising for the new Small Business Edition mentions it will cover purchase and sale of a business in Tab 13. It does not mention if any of this will be new expanded material over what is found in the Deluxe Edition on page 25-2, however, I can give you some inside information on the fact that it will include information not found in the Deluxe Edition.

The Small Business Edition is a 340 page book that includes 160 pages of the business portion of the Deluxe Edition, plus some repeat business topics found in the 1040 Edition (Tabs 8, 9 and 13), plus new expanded information on partnerships and corporations, plus new expanded coverage of other miscellaneous business topics. The purchase and sale of a business in Tab 13 of the Small Business Edition will expand on the topics covered in Tabs 6 and 25 of the Deluxe Edition, including where to report all of the numbers when an S corporation is liquidated. Issues such as mixed use of business assets will also be expanded upon, such as what happens when you sell mixed use rental property.

For those who purchased Value Package #1 (Deluxe Bk, All States Bk, WebCD, Deluxe CPE), you will have access to all the new Small Business Edition expanded coverage on the WebCD, which includes the 1040 Edition and the Small Business Edition, along with links to IRS forms, instructions, and publications.

[Brad Imsdahl]

I can also give you some information on new developments with the WebCD. The Home Page of the WebCD is displayed in our advertising brochure. You can also download a demo version of the 2006 WebCD with the new 2007 format.

On the Home Page, you will notice a menu at the top called “Tools.” The Tools menu will include extra features such as the 2007 Tax Organizer, 2008 W-4 Calculator, US Series EE Savings Bond Interest Calculator, Amortization Schedule, Fill-in-print worksheets with calculations, Fill-in-print engagement letters, Occupation Specific Tax Information - Cross Reference Links, and more.

The Fill-in-print worksheets with calculations will be useful worksheets found in IRS publications along with other worksheets of our own design, such as basis calculations for partners and S corporation shareholders. It will also include a worksheet for selling mixed use property, and a basis worksheet for a principal residence that includes what to do when you sell your home and some of the energy credits were taken. These worksheets are all fill-in-print with calculations and can be separately saved for each client.

[skhyatt]

I already have my order in for the 1040 Deluxe book. That's all I was going to order. So your saying that the WebCD2007 will include additional/expanded coverage on many topics?

[Gene V]

I already have my order in for the 1040 Deluxe book. That's all I was going to order. So your saying that the WebCD2007 will include additional/expanded coverage on many topics?

That's what he is saying, download the Demo, it's much better than the original WebCD.

[skhyatt]

Downloaded the demo this evening. WebCD looks pretty interesting. Decisions, decisions. Do I get the WebCD and the book or just the CD or ????? I'll probably get the CD for sure. Thanks for the replies.

[JG EA]

Another thing to buy. The course for CPE based on 2006 information is the best correspondence course I've ever taken. I definitely plan to buy one for next year also.