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posted Jan 23, 2023 10:28:51 PM

Reporting sale of vehicle used for business using only mileage expense entire time of ownership

Sold vehicle used for business for $8,000 in 2022.  Paid $36,000 for vehicle in 2007.  Only used vehicle for business an average of 25% of total mileage (never over 50%) so always used business mileage expense method.  Total amount of mileage attributed to depreciation is $4,833.  Since basis ($36,000 less depreciation of $4,833) is more than what we sold it for, there should not be a gain.  But when I enter information into Turbo tax it calculates a gain.  Below is both ways I've tried reporting sale.  

         As reported in Business Expenses                                  As reported in "Sale of Business Property" section      25% of price paid for vehicle in 2007 - $9,000                     Full price paid - $36,000.

25% of Sale price -                                    $2,000                     Full sale price    $8,000

Depreciation declared.                            $4,833                     Depreciation     $4,833

Loss                                                             -$2,167                     Loss                    -$23,167

 

Last year I also sold a vehicle and had this problem.  I was advised that because of vehicle's age, Turbotax assumed vehicle had been totally depreciated and that a way to work around it was to remove vehicle for personal use and then report in "Sale of Business Property" section which I did.  Since it did not result in a gain, Turbotax removed the sale from the return.  This year I tried to do the same thing, but Turbotax said I needed to recapture the depreciation of $4,833 which causes an increase in taxes owed.

Also, I did not use vehicle for business before it was sold in 2022 so entered -0- miles but am getting error because it requires more than -0- to be entered even when vehicle removed for personal use/sold.

Thank you for help.

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1 Replies
Intuit Alumni
Jan 24, 2023 5:18:29 AM

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