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Sale of vehicles used in rental properties

Forum|Forum|4 years ago
January 31, 2022
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Own two rental properties and use multiple vehicles for each. Each year I apportion travel (standard expense deduction) to each property using both vehicles. Sold one and traded in the other.

Do I enter the sales under each property or just under one property? If just one, how do I dispose of the vehicles on the other property? The sold vehicle was used on one property since 2008, the trade-in was placed in service in 2018.

Thanks!

Best answer by PatriciaV

Yes, if the vehicles were not used exclusively for your Rental property, then you will need to apply the business use percentage to the sales price for each vehicle for each property.

PatriciaV

You will need to allocate each sale between the businesses where each vehicle was used.

Use any reasonable method to allocate. Total vehicle mileage over the life of the vehicle is probably the most common choice.

For example:

Business 1: 1500 total miles reported
Business 2: 500 total miles
Sum of miles = 2000 (1500 + 500)
Total Sales proceeds = $4000
1. Business 1 = $4000 x (1500/2000) = $3000 sales proceeds
2. Business 2 = $4000 x (500/2000) = $1000 sales proceeds

When you report this sale in the Vehicle Expense section of your Business, you can indicate that you 'stopped using the vehicle' for business, and enter details about the Sale or Trade In.

Click this link for more detailed info on How to Enter a Business Vehicle Trade In.

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B

BenjamineAuthor

Thanks for the quick reply, but I'm still confused after reviewing your example! FYI - I am working on the Rental Income Vehicle screen (not the business section if that is applicable).

Total mileage when sold was 55,786.

Property A: 4,504 business miles driven. Placed in service 2008 FMV $7,500

Property B: 4,075 business miles driven. Placed in service 2010 FMV $6,000

The sales screen (after indicating no longer in service) instructs me to calculate business portion.

Property A: 7.30% (55,786 - 4,504 = 51,282).

If this is correct, would I then multiply the sales price by 7.30% to get the business portion of the sales price for Property A?

I greatly appreciate your help and sorry to be such a dunce! Math is not my forte!

PatriciaVAnswer

Yes, if the vehicles were not used exclusively for your Rental property, then you will need to apply the business use percentage to the sales price for each vehicle for each property.

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