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Posted by Harlan Lunsford on January 25, 2007, 2:43 am
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christine.taveras@gmail.com wrote:
> I recently found this group and have found it to be very
> helpful on numerous topics. After doing some search, I
> wasn't able to find the answer to what I was looking for.
> I've tried to understand the IRS publications 544 and 946
> but I give up. So, I decided to start my first post. I
> have a home computer that is used for job related work at
> about 60%. It was placed in service in July 2006. I would
> like to claim section 179 but I'm concerned about the
> recapture rule. I'm concerned about it because I probably
> will change job in the next 5 years (life of the computer)
> and I upgrade/sell my computer about every two years. As
> far as I understand it, if the job related usage changes
> (new job or drops below 60%), I would have to recapture the
> deduction and report the difference using a different
> depreciation method as gain. Is it worth using section 179
> now and report the gain later or just using the regular
> depreciation method?
You've got it figured out already I think. I would not
advise a client with uncertain prospects like yours to use
sec 179.
My second question is how about if I
> sold the computer in a year at a loss (computer becomes
> absolete the minute it's off the shelf and resell value is
> almost less than half within a year)? Do I still report the
> same gain by using a different depreciation method (and if
> so, what is my basis, the cost or the sell price?) Or do I
> have a loss of 60% of the loss that is job related? Would
> someone please help and explain to me how that works?
You already know that if business usage drops below the
already calculated percentage recapture is required. So
then, if you sell an asset, i.e. no longer have it, i.e.
business usage drops..... problems.
ChEAr$,
Harlan Lunsford, EA n LA
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