Taxes from Sellling some Equipment
alex
someone I know who lives now in Mexico City wants to buy it. I will
get paid by bank transfer.
He offers to pay ongoing prices which is about $5,000 more than I paid
for. I never depreciated or involved these equipment in any prior
taxes. It private property.
The question is handle it in my tax return the gain, specifically:
1. Can I declare it as long term cap gain of $5000 and what TurboTax
form I should use?
2, If yes, if I ship it in 2009 and get paid in 2010 in which tax
year I need to declare it?
3. If no to q1, how else can/should I handle this. I don't want to
do the wrong thing.
Thanks, Alex
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removep...@yahoo.com
> I have some accoustical equipment bought about five years ago and
> someone I know who lives now in Mexico City wants to buy it. �I will
> get paid by bank transfer.
> He offers to pay ongoing prices which is about $5,000 more than I paid
> for. �I never depreciated or involved these equipment in any prior
> taxes. �It private property.
The question is, what is personal or business property. If business
property, then you should have depreciated it.
> The question is handle it in my tax return the gain, specifically:
> 1. �Can I declare it as long term cap gain of $5000 and what TurboTax
> form I should use?
No. If it is personal property, it is ordinary gain. If it is
business property, it is business gain, with the depreciation also
being recaptured. For personal property I think you just enter $5,000
on Line Other Income of page 1, and for business property use form
4797.
Any amounts paid to improve the property would also add to the cost
basis. But repairs do not add to the cost basis.
> 2, �If yes, if I ship it in 2009 and get paid in 2010 in which tax
> year I need to declare it?
2010 if you're a cash basis taxpayer. Most taxpayers are cash basis.
In this case you report the income when you have "constructive
receipt" of the check, cash, or credit card charge.
Bill Brown
> I have some accoustical equipment bought about five years ago and
> someone I know who lives now in Mexico City wants to buy it. �I will
> get paid by bank transfer.
> He offers to pay ongoing prices which is about $5,000 more than I paid
> for. �I never depreciated or involved these equipment in any prior
> taxes. �It private property.
> The question is handle it in my tax return the gain, specifically:
> 1. �Can I declare it as long term cap gain of $5000 and what TurboTax
> form I should use?
Yes, it is long term capital gain reported on Schedule D.
> 2, �If yes, if I ship it in 2009 and get paid in 2010 in which tax
> year I need to declare it?
2010
> 3. �If no to q1, how else can/should I handle this. �I don't want to
> do the wrong thing.
>
N/A
Alan
> On Dec 18, 10:36 am, alex<aturchi...@hotmail.com> wrote:
>
>> I have some accoustical equipment bought about five years ago and
>> someone I know who lives now in Mexico City wants to buy it. I will
>> get paid by bank transfer.
>> He offers to pay ongoing prices which is about $5,000 more than I paid
>> for. I never depreciated or involved these equipment in any prior
>> taxes. It private property.
>
> The question is, what is personal or business property. If business
> property, then you should have depreciated it.
>
>> The question is handle it in my tax return the gain, specifically:
>
>> 1. Can I declare it as long term cap gain of $5000 and what TurboTax
>> form I should use?
>
> No. If it is personal property, it is ordinary gain. If it is
> business property, it is business gain, with the depreciation also
> being recaptured. For personal property I think you just enter $5,000
> on Line Other Income of page 1, and for business property use form
> 4797.
>
capital gain, not ordinary.
removep...@yahoo.com
> > I have some accoustical equipment bought about five years ago and
> > someone I know who lives now in Mexico City wants to buy it. �I will
> > get paid by bank transfer.
> > He offers to pay ongoing prices which is about $5,000 more than I paid
> > for. �I never depreciated or involved these equipment in any prior
> > taxes. �It private property.
>
> The question is, what is personal or business property. �If business
> property, then you should have depreciated it.
>
> > The question is handle it in my tax return the gain, specifically:
> > 1. �Can I declare it as long term cap gain of $5000 and what TurboTax
> > form I should use?
>
> No. �If it is personal property, it is ordinary gain. �If it is
> business property, it is business gain, with the depreciation also
> being recaptured. �For personal property I think you just enter $5,000
> on Line Other Income of page 1, and for business property use form
> 4797.
Actually publication 550 says
Personal use property. Property held for personal use only, rather
than for investment, is a capital asset, and you must report a gain
from its sale as a capital gain. However, you cannot deduct a loss
from selling personal use property.
So I guess you need Schedule D, the long term gains section.
D. Stussy
news:d29d2678-b125-4d33...@p19g2000vbq.googlegroups.com...
> On Dec 18, 1:36 pm, alex <aturchi...@hotmail.com> wrote:
> > I have some accoustical equipment bought about five years ago and
> > someone I know who lives now in Mexico City wants to buy it. I will
> > get paid by bank transfer.
> > He offers to pay ongoing prices which is about $5,000 more than I paid
> > for. I never depreciated or involved these equipment in any prior
> > taxes. It private property.
> > The question is handle it in my tax return the gain, specifically:
> > 1. Can I declare it as long term cap gain of $5000 and what TurboTax
> > form I should use?
>
> Yes, it is long term capital gain reported on Schedule D.
>
> > 2, If yes, if I ship it in 2009 and get paid in 2010 in which tax
> > year I need to declare it?
>
> 2010
Not so fast. This answer will technically depend on the taxpayer's
accounting method.
Bill Brown
wrote:
> "Bill Brown" <brow...@longwood.edu> wrote in message
>
> news:d29d2678-b125-4d33...@p19g2000vbq.googlegroups.com...
>
>
>
>
>
> > On Dec 18, 1:36 pm, alex <aturchi...@hotmail.com> wrote:
> > > I have some accoustical equipment bought about five years ago and
> > > someone I know who lives now in Mexico City wants to buy it. I will
> > > get paid by bank transfer.
> > > He offers to pay ongoing prices which is about $5,000 more than I paid
> > > for. I never depreciated or involved these equipment in any prior
> > > taxes. It private property.
> > > The question is handle it in my tax return the gain, specifically:
> > > 1. Can I declare it as long term cap gain of $5000 and what TurboTax
> > > form I should use?
>
> > Yes, it is long term capital gain reported on Schedule D.
>
> > > 2, If yes, if I ship it in 2009 and get paid in 2010 in which tax
> > > year I need to declare it?
>
> > 2010
>
> Not so fast. � This answer will technically depend on the taxpayer's
> accounting method.
>
basis taxpayer (as are almost all individuals).