Tax Law (Questions About Taxes)/musical instrument sale

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Question
In 2012 I sold a musical instrument that I used professionally.  I bought it in 1991, and in subsequent years spent more money on it for repairs and maintenance.  I sold it for more than the original sale price, and am wondering if I can add the cost of repairs to the original cost on my tax return.  I'm an employee of an orchestra and am wondering about the right way to go about reporting the sale on my tax return.  Thanks very much in advance for whatever help you can offer!

Answer
David,

The cost of repairs cannot be added to your cost.  Actually, if you depreciated the cost of the instrument or if you expensed it outright, you have an reduced basis in the instrument.

For example, if you expensed it, your basis is now zero, so the entire sale price is profit.  If you depreciated it, the current book value is your basis and any excess over that basis is profit.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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