Quote:
Originally Posted by xtxoxpxd  texas
sort of a general question here.
if my business sells some equipment, recognizes a gain, and then the equipment is returned a few months later and the purchase price refunded, how is that treated for taxes?
do i still recognize a gain and see a step up in basis? is the transaction effectively nullified? |
In your books, you show the transaction, and then you show the return of the equipment, which, in the end, nullifies the sale. There is no gain, and no sale to report. There is also no step up in basis unless you incurred some costs involved with the sale and return, and then your basis is only stepped up by those costs, unless those costs can be expensed as ordinary business expenses.
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