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#1 (permalink)
01-25-2015, 01:42 PM
 Junior Member Join Date: Jan 2015 Posts: 3
recapturing Section 179 deduction on sold cell phone used partially for business

I have a tiny business. I bought a cell phone in Nov. 2012 that was used 70% for business purposes. It cost \$215.42, and I elected to take a Section 179 deduction in 2012 for the full business portion (70%), which was \$150.79. I then sold the phone in Oct. 2014 for \$190.

I'm hoping someone can tell me how to report this, as I assume it goes on Form 4797 using lines 20-25b, but I don't know what numbers exactly to put on those lines. (For example, is the "gross sales price" on line 20 the full \$190, or do I just put 70% of that? What is the "depreciation allowed or allowable" on line 22?) Any help with this would be appreciated! Thanks.

#2 (permalink)
01-26-2015, 01:16 PM
 Moderator Join Date: Oct 2010 Posts: 5,226
I'm hoping someone can tell me how to report this, as I assume it goes on Form 4797 using lines 20-25b, but I don't know what numbers exactly to put on those lines. (For example, is the "gross sales price" on line 20 the full \$190, or do I just put 70% of that?========>>>>>>>>the full, \$190

What is the "depreciation allowed or allowable" on line 22?) ==========>>>>>>>the whole sec 179 exp, \$150.79.you need to recapture up to \$150.79 as sec 1245 exp taxed as ordinary income at 25%aslongas your tax rate is 25% or higher.

#3 (permalink)
01-26-2015, 04:06 PM
 Junior Member Join Date: Jan 2015 Posts: 3
Thanks for the reply! I hope you can help with one more question -- Is the "cost or other basis" on line 21 the full purchase price of \$215.42, or is it the business portion of \$150.79? (With \$215.42 as the basis I am coming up with \$125.37 that needs to be recaptured, and with \$150.79 as the basis I am concluding with the full \$150.79 that needs to be recaptured. Hopefully I'm doing that right.)

Much appreciated.

#4 (permalink)
01-26-2015, 10:14 PM
 Moderator Join Date: Oct 2010 Posts: 5,226
Quote:
 Originally Posted by sarah9876 Is the "cost or other basis" on line 21 the full purchase price of \$215.42, or is it the business portion of \$150.79? (With \$215.42 as the basis I am coming up with \$125.37 that needs to be recaptured, and with \$150.79 as the basis I am concluding with the full \$150.79 that needs to be recaptured. Hopefully I'm doing that right.) Much appreciated.
20
Gross sales price (Note: See line 1 before completing.).===190

21
Cost or other basis plus expense of sale.....215.42

22
Depreciation (or depletion) allowed or allowable...===150.79
23
Adjusted basis. Subtract line 22 from line 21....===64.63

24
Total gain. Subtract line 23 from line 20.....==125.37

#5 (permalink)
01-26-2015, 10:55 PM
 Junior Member Join Date: Jan 2015 Posts: 3
Thank you!

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