Skip to main content

Legal

Tax & Accounting

Trade & Supply

Risk & Fraud

News & Media

Books

Developers

Depreciation

Sold / scrapped disposal method

This topic describes the fields that appear in the Disposal tab or the Enter Disposal Information window after you select Sold / Scrapped as the method of disposal and you enter the date on which the asset was disposed.

Special information

Fields and buttons

Enter the gross proceeds from the sale.
Enter the amount of expenses related to the sale in this box. Amounts entered here are added to the cost of the asset for reporting on Form 4797.
If the asset is listed property or a luxury auto and you entered Sold / Scrapped, enter the asset's overall (or lifetime) business use percentage. The application uses this overall percentage to calculate the basis for the gain/loss calculation only. The percentage does not affect any year's depreciation expense.
This shows the amount of depreciation actually taken on the disposed asset. When disposing of a single asset, you can override the amount here if the depreciation is greater or you disagree with the total.
The application automatically enters depreciation allowed on other property for 1245 assets that were received in trade from a prior Like-kind exchange and the option is marked under Setup, Options. If you disagree with the total, you can override the amount in this field.
The application automatically calculates and displays the gain or loss for this asset. You can't override the gain or loss on this tab.
To view an explanation of the gain/loss calculation, select the underlined field label to open the Tax Gain/(Loss) window.
This shows the amount of depreciation actually taken on the disposed asset. When disposing of a single asset, you can override the amount here if you disagree with the total.
The application automatically enters depreciation allowed on other property for 1245 assets that were received in trade from a prior Like-kind exchange and the option is marked under Setup, Options. If you disagree with the total, you can override the amount in this box.
The application automatically calculates and displays the gain or loss for this asset.  You can't override the gain or loss on this tab.
To view an explanation of the gain/loss calculation, select the underlined field label to open the Book Gain/(Loss) window.
From the dropdown list, select the type of property being disposed of to determine which part of Form 4797 applies. The application default is section 1245 property used in a trade or business or section 1250 real property. If you are uncertain about which part of Form 4797 applies, consult the IRS instructions for the form.
When you enter Form 4797 information for raised cattle, horses, or other livestock sold at a gain, you must use the force options that are available from the dropdown list.
If you don't want the asset reported on Form 4797, select
Not reported on Form 4797
 from
Type of property
.
If the asset was not used in trade or business, select
Not used in trade or business
 from
Type of property
.
Mark this checkbox if the asset is Section 1245 property that should be disposed of as a like-kind exchange for book or state purposes.
Mark this checkbox if proceeds were reported on Form 1099.
Mark this checkbox if the asset was sold to a related party and the loss is disallowed.
Select this to open a window in which you can enter the like-kind exchange disposal information for personal property exchange.
Mark this checkbox to apply the business use percentage to gross proceeds and expenses.
When disposing of an asset that results in a Form 4797 Part III gain, select this to access a window in which you can supply the necessary information so UltraTax CS can prepare Form 4797, Part III.
Select this to open a window in which you can enter installment sale information to complete Form 6252.
For 990 clients only:
 If the entity type of the open client is Exempt, Income Classification appears here, rather than the Installment Sale button.
Select this to open a window in which you can enter state information regarding this asset for the following states.
  • 1040 clients:
     Idaho, Iowa, Massachusetts, New Hampshire, Pennsylvania, Vermont, and Wisconsin.
  • 1120 clients:
     Pennsylvania and Wisconsin
  • 1065 clients:
     Pennsylvania and Wisconsin
The following boxes appear only for 1120 S Corporation clients.
If the asset is subject to the S Corporation built-in gains tax, enter the fair market value at the S corporation election date. The application calculates the amount of recognized built-in gain or loss on that asset.
  • The built-in gains tax allocated to ordinary income items transfers to the Taxes and Licenses line on Form 1120S, Page 1.
  • The built-in gains tax allocated to section 1231 items reduces the section 1231 gain reported on Schedule K for Form 1120S.
  • The built-in gains tax allocated to unrecaptured section 1250 items reduces the section 1231 gain and the unrecaptured section 1250 gain reported on Schedule K for Form 1120S.
If the asset is subject to the S Corporation built-in gains tax, enter the adjusted basis at the S corporation election date. The application calculates the amount of recognized built-in gain or loss on that asset.
  • The built-in gains tax allocated to ordinary income items transfers to the Taxes and Licenses line on Form 1120S, Page 1.
  • The built-in gains tax allocated to section 1231 items reduces the section 1231 gain reported on Schedule K for Form 1120S.
  • The built-in gains tax allocated to unrecaptured section 1250 items reduces the section 1231 gain and the unrecaptured section 1250 gain reported on Schedule K for Form 1120S.
Enter the amount paid in advance against the built-in gain.

This article applies to:

  • Product: UltraTax CS
  • Return type: 1040 Individual, 1120 Corporation
  • Subject: Depreciation

Related content

Chat now

error-icon

Triva isn't available right now.

Check out the support page for our phone number and hours

error-close