We have a law firm that was operating as an S Corp for many years where there was two 50-50 shareholders. They accumulated about $100k of furniture and fixtures over the years and we always took Sec 179 so everything is fully depreciated.
Shareholders decided to go their own ways and the firm was being wound down over the last 12 months. One shareholder started another firm instantly with a new lawyer. The other shareholder was going to semi retire but he took a few pieces of F&F (his desk, chairs, etc) but most was left in the office. The new firm will be using the same office space and signed a lease.
We valued the F&F for a token amount and picked up a gain on the final S Corp. Let's say that number was $5k
For the new firm, are we supposed to pick up prior accumulated depreciation for recapture purposes. So entry for F&F at new firm is
F&F 105,000
Accum Depr 100,000
Contributed Cap 5,000
Or just pick up the $5k as a new asset no prior depreciation