How do I transfer the gain on an involuntary conversion from one farm tractor to another?

[Kenneth Keate]

Farm client's tractor and some other things, all used in business, were destroyed in a fire.
They replaced the tractor.
They have a gain on the fully depreciated tractor.   
How do I transfer the gain into the badis of their new tractor?

[George4Tacks]

https://www.journalofaccountancy.com/issues/2002/sep/thetimingofsection1033elections.html

[Kenneth Keate]

Thanks for the response.  I know the law.  I was trying to figure out how to do it in proseries.  

How do I take care of the Gain and transfer it into a new asset in ProSeries?   (It is an involuntary conversion).  

[George4Tacks]

Maybe @TaxGuyBill can provide the HOW TO. 

[TaxGuyBill]

As the article that George gave you pointed out, you can just omit the old property.  So enter the disposition date in the disposition section, and leave the sale price BLANK.  Or if you want it to show up on the tax return, enter a sales price to result in a $0 gain/loss.

Calculate the gain, and just add it to the Basis when you enter the Asset Entry Worksheet for the new property.

[taxiowa]

Actually you subtract the deferred capital gain amount from basis of new asset.  Make sure you attach statement detailing transaction and amount deferred.

[TaxGuyBill]

Thanks for the correction.   🙂