Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

How do I report no depreciation for idle equipment?

Highlighted
Level 3

Client did not operate a segment of their business last year. How do I report no depreciation due to idle equipment?

Thanks.

Labels (1)
0 Cheers
1 Solution

Accepted Solutions
Highlighted
Level 15

In the asset entry worksheet, enter a date of sale but leave the box open for the sales price.

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.

View solution in original post

6 Replies 6
Highlighted
Level 8

I go into the Asset Entry Worksheet and override current year depreciation.   

Highlighted
Level 15

In the asset entry worksheet, enter a date of sale but leave the box open for the sales price.

ex-AllStar, ex-Lutefisk taste taster, ex-ACME product tester
and ex marks the spot where those rocks and anvils hit me.

View solution in original post

Highlighted
Level 3

Thanks for your help.

DKH, will I be able to e-file if I override the depreciation numbers? It seems as though anytime I override anything I get e-file errors.

IronMan, I was thinking of doing that but then those assets won't show up next year, will they? I guess the alternative is to re-enter the assets in 2020. Or is there another option next year?

Thanks.

Highlighted
Level 8

Should get a warning message there's an override when e-filing but can choose to continue with efiling transmission.   

 

Highlighted
Level 10

If it's temporarily idle you continue depreciation.  See IRS Pub 946 (2019) page 7 column 2:

https://www.irs.gov/pub/irs-pdf/p946.pdf

Idle Property
Continue to claim a deduction for depreciation on property
used in your business or for the production of income
even if it is temporarily idle (not in use). For example, if
you stop using a machine because there is a temporary
lack of a market for a product made with that machine,
continue to deduct depreciation on the machine.

Rick

Highlighted
Level 3

Thanks, Rick.

The business is winding down and only subletted rent to an existing business next door during 2019 - no business activity in 2019.

I found out that all the equipment was destroyed in a fire this year. 

Thanks.

0 Cheers