Question

Expense or Depreciate a drone bought and sold in 2020

Forum|Forum|5 years ago
March 9, 2021
1 reply
0 views

Bought a drone for business use in June 2020 and sold it in August 2020. It wasn't a good fit for my business. How should I account for this purchase and sale on my tax return?

TurboTax Home & Biz Windows

D

DavidD66

I would capitalize it and then report as the sale of an asset. It will result in a short term capital gain as opposed to ordinary income.

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B

BCholt12Author

It was sold at a loss of about $500, why will it show as a capital gain?

T

ToddL99

If you sold it for less than what you paid for it, then it will be a capital loss.

The best way to report this would be to "capitalize it" (as @DavidD66 stated). Enter it in the Business Asset interview of TurboTax Self-Employed (or Home and Business) and indicate that you stopped using it in August 2020. Any loss on the disposition would be a short-term (ordinary) loss.