Question

Business Vehicle Lemon Law Return Capital Gains

Forum|Forum|2 years ago
April 5, 2024
1 reply
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I purchased a used car for business use in 2023 for $48k, it ended up being a lemon and the manufacturer bought it back 6 months later in 2023 for $45k. In the meanwhile I paid $565 in registration and other expenses for gas and maintenance. Turbotax is telling me I had a capital gain of $13,300 for sale of this vehicle. I can't understand. It was a simple return for less than the purchase price. How did I make $13,300 for a faulty car in 6 months?

Business Expenses

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Mike9241

the lemon laws may not apply to business vehicles. this depends on your state's laws

if not you sold a business vehicle for $45,000

that had a cost of $48,000 + registration fees and sales taxes.

no depreciation would be allowed because the vehicle was acquired and disposed of in the same year. so you should end up with a loss of $3,000 +

we can't see what you entered so have no idea why you had such a gain.

Rick19744

As noted by @Mike9241 based on your facts, no depreciation should be taken.

Check this within TT; no depreciation, no section 179, etc.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

D

dlaine21Author

Thank you but how do I remove the depreciation from TurboTax's calculations? I didn't ask it to calculate depreciation. I simply answered all the prompts: Date of purchase, amount, date of sale, amount. The dates are both within 2023 and the sale amount was less than the purchase amount - so shouldn't it know not to create a depreciation schedule and calculation gains from the sale? What do I do?