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Question about depreciation for a personal car used for business and have now sold

Forum|Forum|2 years ago
March 25, 2024
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I used my personal car for business from 2013 thru 2023, when I sold it to my daughter for $8,500. She took it to a mechanic and it needed $3,000 worth of repairs, which I gave back to her, so I netted $5,500.

Edmunds suggests a FMV of my car in “Rough” shape as $7,259. (I knew it needed work which I'd reimburse her for, but not $3,000 worth.)

I used the standard mileage deduction every year.

During the period of 2013-2022 (TurboTax says they'll calculate 2023 for me automatically) I used it 9.27% for business. (9.33% if I calculate from 2013-2023)

I entered the "Sales Price (Business Portion Only)" of $513. ($5,500 x 9.33% = $513)

The car cost $23,177 NEW.

I did the calculation of AMT Depreciation (for the business portion) suggested by TurboTax for each year from 2013-2022 and get $1,248 when I add them all up.

I entered $1,248 for "Basis for gain/loss (enter 100% of basis).“ Is this correct?

I entered $1,248 for "AMT Basis for gain/loss (enter 100% of basis)." Is this correct?

On the next page, I entered $1,248 for "Prior Depreciation Equivalent"??? Is this correct?

I entered $1,248 for AMT "Prior Depreciation Equivalent"??? Is this correct?

It calculates my GAIN is $513. Does this all sound correct?

I’ve used TurboTax for years and this section is the most confusing that I’ve ever dealt with. I don’t mind paying taxes on the gain if it’s correct, I’m most concerned that the calculation is accurate so that I don’t get hassled.

Thanks

TurboTax Home & Biz Windows

Best answer by AmeliesUncle

TurboTax is not set up to report the sale of an asset (including a vehicle) that has varied in business percentage from year to year.

Did you purchase the vehicle in 2013 (when you started using for business)? If so, at first glance you have a LOSS, not a gain. However, because you sold it to a "related party", the loss is not allowed.

Because you don't have a gain or a deductible loss, I would just tell TurboTax that you converted it to personal use, which will get it off your tax return and property give you no gain or deductible loss.

A

AmeliesUncleAnswer

TurboTax is not set up to report the sale of an asset (including a vehicle) that has varied in business percentage from year to year.

Did you purchase the vehicle in 2013 (when you started using for business)? If so, at first glance you have a LOSS, not a gain. However, because you sold it to a "related party", the loss is not allowed.

Because you don't have a gain or a deductible loss, I would just tell TurboTax that you converted it to personal use, which will get it off your tax return and property give you no gain or deductible loss.

P

philherzAuthor

Thanks for your reply...I've seen similar suggestions given to other people struggling to do this part of the taxes!

YES, I purchased the vehicle in 2013 when I started using it for business.

Here's my question-

I get to a page in the TurboTax process and it asks:

Do any of these apply to the 2014 Subaru Forester?

Select all that apply.

You started using it as a personal vehicle 100% of the time at any point in 2023 (Answered YES)

Your percentage of business use of the vehicle varied over the years (Answered YES)

You gave it away as a gift in 2023

None of these

It looks like this gets me out of this whole mess, but it then talks about a "section 179 recapture."

Is this something they'll be asking me about later in this process?

If so, I may be back for some more help.

Thanks so much....This is the first time in the many years that I've been using TurboTax that I've reached a section that seemed to require a lot of specific accounting skills to complete.

PatriciaV

If you claimed the Standard Mileage Deduction every year while the vehicle was used for business purposes, you should have no Section 179 recapture to report.

TurboTax Community is the best source of assistance when preparing your tax return. Feel free to post any further questions you may have.

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