How to remove a Fully Damaged Fixed Asset

balajibv · ‎April 09, 2020

We bought an electric equipment in 2019 but it got damaged in an event while handling in 2020.

Its completely useless and needs to be junked. How to record this transaction?

We claimed depreciation only in 2019.

john-pero · ‎April 10, 2020

"Sell" it internally off of the books. Here is one way

Create a journal entry to Credit the value of the asset on your books, Debit a new expense account you call Write Off Damaged Equipment. You would exclude this particular expense from your actual expenses but include it on a Schedule D where capital gains and losses are reported and then transferred to income form

View solution in original post

john-pero · ‎April 10, 2020

Yes, the Schedule D is something the accountant will do at tax time. It is not a form that can be generated from QuickBooks. ANd that may or may not be the correct form

There is not really a blanket tax line to map to with QB but "unassigned" will catch his eye

View solution in original post

john-pero · ‎April 10, 2020

"Sell" it internally off of the books. Here is one way

Create a journal entry to Credit the value of the asset on your books, Debit a new expense account you call Write Off Damaged Equipment. You would exclude this particular expense from your actual expenses but include it on a Schedule D where capital gains and losses are reported and then transferred to income form

balajibv · ‎April 10, 2020

Thanks @john-pero

Im not a full accountant, but manage the QB for my business just upto posting entries, JE and balancing it all correctly. My accountant takes care of final reports, filing etc.

I got the first part of the Journal entry.

But I didnt understand how to include it on Schedule D. Is that a manual task my Account would do?

Do I need to associate the new expense account with a different tax line so that he gets it when he pulls that report?

john-pero · ‎April 10, 2020

Yes, the Schedule D is something the accountant will do at tax time. It is not a form that can be generated from QuickBooks. ANd that may or may not be the correct form

There is not really a blanket tax line to map to with QB but "unassigned" will catch his eye

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How to remove a Fully Damaged Fixed Asset