Taxable Event?

To reiterate the comment of the moderator... ignore it at your own risk You have to address it. ___________________________________

-----> real address on hobokeni or hobokenx

Assuming this "business" you had was a sole proprietorship, your ownership of the equipment could (IMHO) legitimately include an extended cost basis. Assuming you had records of the original cost of those items, you could enter the 1099 data on a Schedule D -- itemizing as appropriate -- and show the actual cost basis and pruchase date. If, as is more likely, you no longer have records of the actual purchase date and cost of the individual items, it would be reasonable to show an approximate date of purchase and at least estimate their cost basis as the current value (or same as the amounts received) -- thus erasing any gain. In the unlikely event any of these items actually increased in value over your original cost, then you ought to report the gain. Bill

it is of course possible that such basis exists. And that basis would be the tax book value of said equipment or FMV, whichever is lower. Of course if the section179 had been used for that equipment, basis is naturally zero. The only possible basis at this time however is zero, in the absence of records. Result = taxable. ChEAr$, Harlan Lunsford, EA n LA

Are you proposing that I write this off a second time? It was generally expensed in the year purchased - many years ago. I would feel better about assessing storage costs since the business ended.

Yes. Money changed hands.

Did the equipment have a cost basis at that time? Did you write it off (for tax purposes)?

The IRS won't.

Seth

Joe Lauton wrote: [...]

No, do not "write this off" twice. When you ended the business, you disposed of assets by selling them, converting them to personal use, junking them, or some similar process. At that time, you may have been required to recapture previously deducted accelerated depreciation expenses that you turned out to be ineligible for, for example listed property business use falling below a certain percentage prior to full depreciable life.

If you junked the assets, the basis is zero, and any gain from re-sale is taxable income, as has already been noted.

If your business ended, then storage costs of (worthless?) non-business property are a personal expense and not deductible.

-Mark Bole

However, they might be allowed to be added to the basis of that property.

Seth

Good thing you said "might be", for those storage costs are also personal in nature and therefore not to be capitalized.

ChEAr$, Harlan

What was his purpose in holding on to the property and paying storage costs? If it was in hope of a later sale, that seems like a business to me.

Seth

Don't really matter as to his intent, or purpose.

ChEAr$, Harlan

I do not doubt (perhaps others do) the validity and your correct interpretation of the IRS rules as written - however ridicules they may be.

Suppose that my business discarded old property (I was best informed as to time and place) and I was lucky to sell these 'found' items at a garage sale. Would this also be a taxable event? Are incomes from ALL garage sales taxable ?

Before answering your question, need to know what form your business takes: proprietorship, partnership, corporation (C or S)? LLC? other? Also what is the tax basis of those assets?

ChEAr$, Harlan Lunsford, EA n LA

Sole proprietor, calendar year, cash basis - went out of bus.

Now what about ye olde garage sales?

But still, what about the tax basis of the assets? If it's zero, then yes, income from a garage sale. And by the way, you can't say your business discarded assets when you yourself as proprietor were the business legally.

ChEAr$, Harlan Lunsford, EA n LA

Exactly what do you mean by Tax Basis?

Some was fully expensed or written off. What if some was not?

Basis is cost minus accumulated depreciation, iow, all the tax depreciation that was ever taken, including section 179.

all proceeds taxable.

Then it's up to you to be able to prove the tax basis as outlined above. However, as a practical matter, if you have no records whatsoever, IRS would consider it all taxable.

Moral of the story; never throw away tax returns and supporting documents for business.

ChEAr$, Harlan Lunsford, EA n LA