Level 4

How do I report disposition of depreciated business property as noncash charitable contribution?

Forum|Forum|3 years ago
September 10, 2022
1 reply
11 views

My client is giving depreciated property of adj. salvage value of $3000. If I record the disposition of the assets (depreciation scree) with a $0 proceed, if generates a $3000 loss. However, the client has a charitable contribution receipt from the organization, which will allow a $3000 noncash contribution.

How do I enter the transaction without double dipping 1- in business loss and 2- in charitable contribution.

Thank you!

Diane

This topic has been closed for replies.

T

TaxGuyBill

Level 15

What software are you using?

I assuming you mean the Adjusted Basis is $3000 (not salvage value)?

Is this a C-corporation? S-corporation? Partnership? 1040? Something else?

D

DGEmbryAuthor

Level 4

I am using Lacerte and it is a for a 1040 / Schedule C. His $3000 adjusted basis is salvage value as the property is fully depreciated except for $3000 recorded originally in the depreciation schedule as salvage value.

Thank you

Diane

T

TaxGuyBill

Level 15

Before you do anything, we need to address that salvage value.

Except for a few uncommon things, Salvage hasn't been used for over 35 years. Are the assets part of some of the unusual things that Salvage applies? Or is it a REALLY old asset that was "placed in service" before 1986 (when salvage applied)? If not, it was depreciated incorrectly, and the Basis is now $0 (but you may be able to file Form 3115 to 'catch up' on the missed depreciation).

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