A few years ago a neighbor gave me a small tractor. IH 706. I never put it on my depreciation schedule or anything. I sold it last year. Now my accountant says I have to pay capital gains on it, since there was no basis established on it when I received it. Is this correct ?opinions??
How did this question become so political and,Judge what exactly have we done to this country. Okay back to tax question. Okay if I would have received money as a gift there would be no tax so why on the sale of the tractor.
Take advice from people in a chat room............................ or take advice from a trained accountant.............. what to do, what to do........
If I was looking for a second opinion , it certainly wouldn't be from here.
That is a good neighbor 🙂 I think you probably have to have paperwork from way back that it was a gift, the hassle of amending returns way back wouldn`t be worth it. But I am not an expert, agree with your accountant. If a guy wouldn`t need paperwork, you could say everything you sell was a "gift" to get out of taxes and usually on this stuff they got all those loopholes plugged. 😞
Just throwing it out there RJ . After further research it all boils down to cost basis. Since my neighbor already depreciated it we assume, then my cost basis is zero. So then any amount I sold it for becomes taxable where as with a gift of money the actual dollar amount becomes the cost basis.
