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How do I report no depreciation for idle equipment?

david3
Level 5

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

Thanks.

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IRonMaN
Level 15

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

ACME Taxes, Tatoos, Tires and Turtles (I've expanded my line of products to better serve you)

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6 Replies 6
dkh
Level 11

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

IRonMaN
Level 15

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

ACME Taxes, Tatoos, Tires and Turtles (I've expanded my line of products to better serve you)

View solution in original post

david3
Level 5

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.

dkh
Level 11

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

 

rbynaker
Level 11

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

david3
Level 5

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.

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