How do I report a car I gifted to my son which had business use previously and therefore a CCA/UCC calculation?

[perfectpitch22]

That's great, thanks!

[TurboTaxTerry]

I will post some screen shot examples to compare with your tax return entries and results.

[perfectpitch22]

Last question (I hope) I did as you said and now the sale of the car is reflected.  It seems unfair that the sale of a car that had such little business usage (5% for the last few years and never more than 20%) generates "income" on 100% of the sale price, especially when in fact I passed it on as a gift.  It seems logical  to me that the amopunt of income the sale generates should be in direct proprtion to the the percentage that was claimed as business use.  Although I haven't calculated the figure yet the fact that this sale reduced my tax refund by more than $1,000, this amount might well be greater than any previous benefit I have received?

Thanks for all your help with this

[TurboTaxTerry]

You should review past years tax returns for the amount of CCA claimed since you first started using the car for business purposes. It is this amount that needs to be recaptured. If you have that figure available then it could be to your advantage to add that total on top of the UCC and claim this new amount as the FMV (Proceeds of Disposition) rather than the actual FMV of the car. That would make sure your inclusion into income is restricted to prior year depreciation. (Provided that past CCA plus the UCC is less than your current assumption of FMV)