Closing and grants

[Unregistered]

I have received a grant a year ago for some equipment. I am closing in a couple of months and since it was less than 2 yeas of receiving the grant, I think I have to pay back or give back the items.
What should I do and how will this have an affect on my taxes???

[TomCopeland]

Grant

I have received a grant a year ago for some equipment. I am closing in a couple of months and since it was less than 2 yeas of receiving the grant, I think I have to pay back or give back the items.
What should I do and how will this have an affect on my taxes???

In the year you received the grant you should have reported it as income. If in that same year you deducted the business portion of the amount as an expense, then there is no tax consequence this year when you give the items back. If you were depreciating the items, then you stop claiming the depreciation after 2013.

If you were reporting the grant as income over a number of years, stop reporting any income after 2013.

[Unregistered]

What if I have to give back the money or items? Do I deduct that amount on my income as expense??

[TomCopeland]

grant

What if I have to give back the money or items? Do I deduct that amount on my income as expense??

Sorry I didn't address this before. If you have to give back any money (that you previously reported as income) claim this as a deduction in 2013. If you had to give back the item, don't claim this as a deduction (since you already deducted it). Giving back an item has no tax consequence when you've deducted it in a previous year.