Catherine Posted June 17, 2016 Report Share Posted June 17, 2016 Client with Sch C business bought a new iPhone in February 2015 for the business. Come August, he managed to drop it out of the car while on the freeway and had to go buy a replacement. Form 4562 with asset bought and "sold" for $0 in same year? Form 4797 for the destroyed/lost phone with $0 sale price and 4562 for replacement phone only? Casualty loss (but then how to tie to Sch C not the 1040)? Bundle the costs for the two phones (lost and replacement) and depreciate as a single item with purchase date of first? "Other expense" on Sch C for cost of lost phone and 4562 for replacement phone? Something I have not listed? Thanks! Catherine Quote Link to comment Share on other sites More sharing options...
NECPA in NEBRASKA Posted June 17, 2016 Report Share Posted June 17, 2016 How much did he have to pay for each phone? That would help me to know how I would handle it and what % of business use are they using? Quote Link to comment Share on other sites More sharing options...
jklcpa Posted June 17, 2016 Report Share Posted June 17, 2016 (edited) How much were the phones? I'm guessing the cost exceeded the $500 deminimus safe harbor for 2015. With the IRS raising the safe harbor to $2500 in 2016 and offering audit protection of not challenging earlier implementation of the threshold, I might be inclined to expense these. "Effective for taxable years beginning on or after January 1, 2016, the Internal Revenue Service in Notice 2015-82 increased the de minimis safe harbor threshold from $500 to $2500 per invoice or item for taxpayers without applicable financial statements. In addition, the IRS will provide audit protection to eligible businesses by not challenging the use of the $2,500 threshold for tax years ending before January 1, 2016 if the taxpayer otherwise satisfies the requirements of Treasury Regulation § 1.263(a)-1(f)(1)(ii)." Edited June 17, 2016 by jklcpa added quote from IRS page 4 Quote Link to comment Share on other sites More sharing options...
michaelmars Posted June 21, 2016 Report Share Posted June 21, 2016 also, its expected to be replaced within 10 years 1 Quote Link to comment Share on other sites More sharing options...
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