If close your business do you have to reclaim depreciation on your biz computer?

Harry: If close your business do you have to reclaim depreciation on your biz computer?
My friend asks: If you had a sole proprietorship business for one year, during which time you purchased and used a computer strictly for business use, what happens the next year on your taxes if you close the business on Jan. 1st of the next tax year? Do you have to reclaim some of section 179 deduction (section 179 was used during the tax year of purchase) or is the computer just considered completely written off since the business failed and closed?
tro, are you sure that the computer wouldn’t be considered shifted to personal use once the business closed?

Answers and Views:

Answer by katherine
You will pay back a part of that 179 when you file the returns and the computer is switched to personal property or sold.

Answer by Wayne Z
Yes.

If it was converted to personal use, you would only be allowed one year of depreciation. The difference between that and the 179 deduction has to be recaptured and is considered income.

Answer by mrreliable3599
The difference between the 179 expense taken and what would have been allowed under regular MACRS is recaptured and reported as income on the same schedule on which it was orginally deducted.

The double whammy is that the recapture amount will also be subject to self-employment tax (approx 15%).

Answer by tro
no
if you sold the business you would but you closed, ie your business is probably a loss
and you do not recapture 179 depreciation