Sale of Farm Equipment

[Bird1]

Farmer trades a piece of equipment that he previously took 179 depreciation-the trade value is $300,000. The Cost of new piece of equipment is $450,000.  He is showing a loss of $100,000 on farm so 179 deduction is not available
He will have $300,000 gain from 4797 and a $100,000 loss on F-           Tax due on $200,000 less  standard deduction         Am  I missing something???????????

[TaxGuyBill · Accepted solution]

Unfortunately, that sounds correct (assuming there is not Section 179 recapture).

This is not probably not a good idea for the long-term (due to SE tax), but 100% Bonus depreciation would be probably be available, which would create an NOL.  But again, that isn't a great long-term answer due to SE tax.