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Hello!
So I've recently acquired a client who the previous accountant depreciated an RV over 5 years, from 2003 to 2008.
The client has not filed taxes since 2009, and they are currently trying to file for 2012,13,14 (with approval from IRS).
The problem is the RV is fully depreciated and she wants to remove it from the taxes as an asset, she's concerned that simply disposing of it will garner some heat given their current situation, but it should have never been included on their business books as it doesn't belong to the business but them personally.
There is currently a note on the RV, which they have not paid on in several months, and they're waiting on a repossession at any moment.
I'M trying to figure out ... If you depreciate an asset entirely, then want to get rid of it, but do not have the means to sell it because you only own the note, and not the asset, but it could be repossessed at any time.
So if trying to remove this asset from their depreciation schedule in 2012, should it simply be disposed of on the worksheet and labeled no proceeds?
Please help, and thanks for your time!
So I've recently acquired a client who the previous accountant depreciated an RV over 5 years, from 2003 to 2008.
The client has not filed taxes since 2009, and they are currently trying to file for 2012,13,14 (with approval from IRS).
The problem is the RV is fully depreciated and she wants to remove it from the taxes as an asset, she's concerned that simply disposing of it will garner some heat given their current situation, but it should have never been included on their business books as it doesn't belong to the business but them personally.
There is currently a note on the RV, which they have not paid on in several months, and they're waiting on a repossession at any moment.
I'M trying to figure out ... If you depreciate an asset entirely, then want to get rid of it, but do not have the means to sell it because you only own the note, and not the asset, but it could be repossessed at any time.
So if trying to remove this asset from their depreciation schedule in 2012, should it simply be disposed of on the worksheet and labeled no proceeds?
Please help, and thanks for your time!