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Old 01-25-2015, 01:42 PM
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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.



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Old 01-26-2015, 01:16 PM
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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.



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Old 01-26-2015, 04:06 PM
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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.



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Old 01-26-2015, 10:14 PM
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Quote:
Originally Posted by sarah9876 View Post
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



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Old 01-26-2015, 10:55 PM
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Thank you!



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