Leaderboard

There is no sale. You tell your tax program that the assets were converted to personal use. Then the person transfers them to the S corp and records them as Old Jack described. The S corp will continue on to depreciate them as if they hadn't changed entities using the carryover basis. In the S corp return, it will show the original depreciable basis and the accumulated depreciation from the Sch C as the opening numbers and depreciate from there. The excess of FMV over the adjusted basis on the date of transfer is nondepreciable.

"Cryptographic hash" is technically correct, but it's also nerd speak. "Encrypted" gets the point across, which is probably more important than technical accuracy when you're sending out that email to hundreds of thousands of users with different levels of technical knowledge. Same here. I got that email from eBay, and I'm still curious about how they're storing passwords. That's a bigger *if* than you might think. It's not uncommon for an application to do a simple MD5 cryptographic hash on a password and store the hash. If that's the case, it's possible to break a pretty good number of passwords using rainbow tables. The *correct* way to do this is to "salt" the hash before storing it... and now I'm hungry. If eBay had been doing it right, there shouldn't be anything to worry about, but it's usually best to assume that everyone is incompetent and act accordingly.

Is that a crime or was he performing a public service?

The "anti-churn" rules do NOT allow you to create a new/higher tax basis from a sale of assets to a related entity. You must have been doing it wrong for 10 years if you have been depreciating a new basis (other than a carryover tax basis). Also a "sale" would mean you have to recognize a tax on gain at FMV as the transaction would not qualify as a tax free exchange for stock.

The pastor asked if anyone in the congregation would like to express praise for answered prayers. Suzie stood and walked to the podium. She said, "I have a praise. Two months ago, my husband, Phil, had a terrible bicycle wreck and his scrotum was completely crushed. The pain was excruciating and the doctors didn't know if they could help him." You could hear a muffled gasp from the men in the congregation as they imagine the pain that poor Phil must have experienced. "Phil was unable to hold me or the children," she went on, "and every move caused him terrible pain." We prayed as the doctors performed a delicate operation, and it turned out they were able to piece together the crushed remnants of Phil's scrotum, and wrap wire around it to hold it in place." Again, the men in the congregation cringed and squirmed uncomfortably as they imagined the horrible surgery performed on Phil. "Now," she announced in a quivering voice, "thank the Lord, Phil is out of the hospital and the doctors say that with time, his scrotum should recover completely." All the men sighed with unified relief. The pastor rose and, tentatively, asked if anyone else had something to say. A man stood up and walked slowly to the podium. He said, "I'm Phil." The entire congregation held its breath. "I just want to tell my wife the word is sternum."