How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask RD Your Own Question
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
Type Your Tax Question Here...
RD is online now
A new question is answered every 9 seconds

Tax Dealing with a business closure and sell of assets

This answer was rated:

I decided to close my moonbounce rental business to devote time to renovate my house. I sold equipment for $6,400 in 5/07. I did not rented equipment at all in 2007. I would like to know what is the best/proper way of claiming this in my Income Tax Return. Overall, I made about $3K in my business on the 2 years of operation (Rental Fees + Selling Price of Equipment - Initial Cost of equipment - Expenses). Claiming the entire $6400 just does''nt seem right. In addition is there a form/section that I can let the IRS know that I no longer operate the business. I am using the turbo tax software.
Were you operating this business as sole proprietor? Did you report the rental fees that you earned in 2006 and related expenses and depreciation on the equipment?
Customer: replied 8 years ago.
It was operated as a sole proprietor (LLC); I did report rental fees and related expenses and I believe also depreciation.

You will report business disposed on Sch D and report sale of assets too including all the expenses you incurred this year in carrying on this activity. Only the net gain if any will be subject to tax. entire $6400 will not be subject to tax.



Let me know if you have any question.


Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

RD and other Tax Specialists are ready to help you

Related Tax Questions