How to Sell Partially Depreciated Assets
- 1). Look up the initial purchase price of your asset.
- 2). Subtract all depreciation deductions taken from the asset. This gives you its current tax basis.
- 3). Contact the buyer of your asset and settle on a purchase price. Record this price for your tax records.
- 4). Deliver the asset to the purchaser and record any of your transportation costs. These costs can used as a deduction against the sale price.
- 5). Subtract the basis of the depreciated asset and all transportation costs from the sale price of the asset. If the result is negative, you can declare a capital loss to reduce your taxes. If the result is a zero, you have no tax consequences. If the result is positive, you will need to divide the gain between recaptured depreciation and capital gains.
- 6). Subtract the gain from the sale from the all depreciation deductions taken. All gains will be first considered recaptured depreciation. If the sale gain exceeds your total depreciation deductions, the remaining profit will be taxed as a capital gain. Recaptured depreciation is taxed as ordinary income while capital gains are taxed at the capital gain rate of 15 percent.