Selling and donating depreciated video equipment for my Schedule C business - tax implications?
I'm winding down my videography business (Schedule C SMLLC) and planning to help a local school (qualified non-profit) set up a video production studio for their students. I want to sell them some of my gear and donate other pieces - all items are on my business asset list and have been depreciated for at least 7 years. I'm thinking worst case scenario here - I need to report income from the sales against the assets, and the donated items can't be written off since they're fully depreciated. Is that accurate? For instance, I'm selling them a camera I originally paid $6,000 for at $1,350, and donating a tripod I bought for $1,300 that's worth roughly the same now, but I purchased it about 10 years ago and it's fully depreciated on my books. These items can't offset each other in any way, right? Just trying to understand the tax implications before I finalize everything.
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Zara Ahmed
When you sell fully depreciated business equipment, you'll need to report the sale proceeds as ordinary income (not capital gains) because of depreciation recapture rules. For the camera example, if you sell it for $1,350, that entire amount would be considered taxable income. For the donated equipment, you can actually still claim a charitable contribution deduction based on the fair market value (FMV) of the items at the time of donation - even if they're fully depreciated on your books. Since your tripod still has value ($1,300 FMV), you can deduct that amount as a charitable contribution (subject to AGI limitations) if you itemize your deductions. The sales and donations are treated separately, so they don't directly offset each other. However, the charitable contribution deduction from the donated tripod could help offset the tax impact from the income recognized on the sold camera.
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Sean O'Connor
•Thanks for the info! So if I understand correctly, I'll have to pay taxes on the full $1,350 I get for the camera, but I can potentially offset some of that by claiming the $1,300 tripod donation on Schedule A? Do I need any special documentation for the donation since it's business equipment rather than personal items?
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Zara Ahmed
•You've got it right about paying taxes on the full $1,350 from selling the camera. For the tripod donation, yes, you can claim it on Schedule A if you itemize deductions. Since the value of your donation exceeds $500, you'll need to complete Form 8283 (Noncash Charitable Contributions) and attach it to your tax return. For items valued over $5,000, you typically need a qualified appraisal, but there's an exception for depreciated business property if you provide the cost basis, acquisition date, and depreciation information. Make sure to get a donation receipt from the school that includes their name, donation date, location, and description of the donated items.
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Luca Conti
I dealt with a similar situation when I closed my photography business last year. I tried figuring it out myself but kept getting confused with all the IRS rules about depreciation recapture and charitable donations. I ended up using https://taxr.ai to analyze my equipment sales and donations. I uploaded my asset list, the sale receipts, and donation documents. The tool helped me understand which items would trigger depreciation recapture and calculated the potential tax hit. It also showed me how to maximize my charitable contribution deductions for the donated equipment. Saved me hours of research and probably prevented some costly mistakes!
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Nia Johnson
•Did it help with determining the fair market value of your equipment? That's the part I'm struggling with - I have no idea what my old lighting gear is actually worth now.
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CyberNinja
•I'm skeptical about these online tools. How accurate was it compared to what an actual accountant would tell you? I've had software make big mistakes with my business taxes before.
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Luca Conti
•The tool helped me research fair market values by analyzing similar equipment sales in the marketplace. It suggested looking at completed sales on popular photography equipment sites to establish reasonable FMVs, which I could then document for the IRS if needed. As for accuracy, I actually had my accountant review everything afterward, and he was impressed. He made only minor adjustments to what the tool recommended. The analysis was surprisingly thorough - it caught several items I'd forgotten were on my depreciation schedule and identified donation documentation requirements I hadn't considered.
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Nia Johnson
I just wanted to update after trying https://taxr.ai for my own video production equipment situation. Initially I wasn't sure if it would be worth the trouble, but I'm glad I gave it a shot. The tool analyzed my equipment list and immediately flagged several items that would trigger significant depreciation recapture if sold instead of donated. It also helped me properly document the fair market values by providing comparable equipment listings. I'm actually restructuring which items I'm selling versus donating based on the analysis - should save me about $1,700 in taxes this year! The documentation templates for the nonprofit were a huge bonus too.
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Mateo Lopez
If you're planning to itemize those donations, be prepared for potential IRS questions. I tried donating some business equipment a few years ago and got stuck in a nightmare trying to reach someone at the IRS to answer my questions. Kept calling their business line for weeks and couldn't get through. Finally used https://claimyr.com and their video demo (https://youtu.be/_kiP6q8DX5c) showed exactly how their system works. They got me connected to an IRS agent within about 20 minutes after I'd wasted hours on hold previously. The agent confirmed I was documenting everything correctly for my equipment donations and gave me specific guidance on how to value items with obsolete technology.
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Aisha Abdullah
•Wait, so this service just gets you to the front of the IRS phone queue? How does that even work? Sounds too good to be true honestly.
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Ethan Davis
•Yeah right. Nobody gets through to the IRS these days. I've literally tried for MONTHS to talk to someone about my business equipment donations. If this actually worked, everyone would be using it.
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Mateo Lopez
•It doesn't put you at the front of the queue - it automates the calling and waiting process. Their system keeps calling the IRS and navigating the phone tree, then alerts you when a human agent is about to come on the line. You don't have to sit there listening to hold music for hours. The service worked exactly as shown in their video demo. I was skeptical too until I tried it. The IRS isn't giving them special treatment - they're just handling the most frustrating part of the process (the endless waiting and redials when you get disconnected).
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Ethan Davis
I have to publicly eat my words about Claimyr. After posting my skeptical comment, I tried it out of desperation since I still needed answers about my equipment donations. Within 30 minutes, I was talking to an actual IRS agent who specialized in business asset donations. The agent confirmed I needed to file Form 8283 for my donated equipment and explained exactly how to document fair market value for items that had been fully depreciated. She also pointed out that I could still claim the charitable contribution even though my business was closing down. Would have taken me weeks to get this info otherwise. Definitely worth it just for the time saved.
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Yuki Tanaka
Don't forget about state tax implications! When I sold my fully depreciated photography equipment, I had to pay state income tax in addition to federal. But some states have more generous charitable contribution provisions than federal. In my state, I could deduct the full FMV of donated business equipment on my state return without the same AGI limitations as federal.
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Sean O'Connor
•I hadn't even thought about state taxes! Do you know if I need separate documentation for state tax purposes versus federal for the donated equipment?
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Yuki Tanaka
•Generally the same documentation works for both federal and state returns. The donation receipt from the school and your completed Form 8283 should be sufficient for both. However, states sometimes have their own forms for charitable contributions that exceed certain thresholds. Where I live, donations over $10,000 required a state-specific form. I'd recommend checking your state's tax department website or calling them directly to confirm any additional requirements.
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Carmen Ortiz
One thing nobody's mentioned yet - make sure the school gives you proper documentation stating they qualify as a 501(c)(3) organization. I donated some video equipment to what I thought was a qualified school program, but it turned out they were operating under a different type of non-profit status that didn't qualify for tax-deductible contributions. Cost me thousands in expected deductions.
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MidnightRider
•Good point! You can also check their status yourself using the IRS Tax Exempt Organization Search tool online. Just enter the organization's name or EIN and it'll tell you if they're qualified to receive tax-deductible donations.
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