Question

Filling in Gain/Loss on business vehicle traded in 2024

Forum|Forum|1 year ago
March 21, 2025
1 reply
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Bought the car in 2012, and used part-time for business every year (from 25% to 65% business use over the years). I have always used TurboTax, and had business deductions for mileage every year. In 2024, I traded in the car on another car, also for business use. I went back through all of my old taxes, and the 2012 was never depreciated. Just mileage taken as a deduction. Why do I need to enter a figure for the gain/loss on the Car & Truck Expenses Worksheet Part VII line 49?

Thank you for your help.

R

RobertB4444

Part of the mileage deduction is depreciation. So as you have taken the mileage for the percentage of business use over the years you have also been depreciating the vehicle. When you sell it part of that sale price is taxable as a recovery of that depreciation deduction.

You will need to figure out your basis in the car using a fairly involved series of steps laid out in this thread by the amazing @DianeW777 .

In the vehicle section simply check the box that it was converted to personal use. You will enter the sale using the steps for Sale of Business Property.

Total all of the business miles for the life of the vehicle
Total all miles on the vehicle for the life of the vehicle
Business miles divided by total miles = Business Use Percentage for the life of the vehicle
Take the original cost of the vehicle x the business use percentage = Business Cost
Take the sales or trade-in price x the business use percentage = Business Sales Price
Calculate all of the business miles by year with the rate in the SMR for depreciation (chart attached) to arrive at the total depreciation considered used by the IRS.

Next enter your Sale of Business Property

Income at the top
Scroll down to Other Business Situations
Select Sale of Business Property
Select Sales of business or rental property that you haven't already reported.
Answer 'Yes' to Do all of the following apply...?
Enter your sales information, do not make an entry for depreciation (no zeros)
1. Description of the Property (Vehicle made/model/year)
2. Sales Price/Sales Expenses
3. Date acquired and date sold
4. Sales Price
5. Cost
6. Depreciation

@pocketpark

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P

pocketparkAuthor

Thank you for your help. I have finished all of the calculations.

Can you tell me the form number and line I enter the conversion from business to personal? "In the vehicle section simply check the box that it was converted to personal use."

Next, what is the form number for the "Sale of Business Property", as the only form I find is one that specifically says NOT for car/truck sales.

If I have that information, then I think I can finish filling it out properly.

I just want to make sure that I am not making any mistakes.

Thank you again!

PatriciaV

Your entries for the vehicle, including the sale information, are shown on the Car & Truck Expenses Worksheet (not an IRS form). Checking the box for "converted to personal use" triggers additional questions during the Step-By-Step interview; there is not a form or line associated with this answer.

Part VII of the Car & Truck Worksheet calculates your gain or loss on the conversion. Any gain or loss would be carried over to Form 4797 Part I.

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