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Level 1
February 28, 2026
Question

Vehicle depreciation recapture

  • February 28, 2026
  • 1 reply
  • 165 views

I have a vehicle that I purchased in 2019 and have used for business and personal since the date of purchase. The amount of business use has varied over the life of the vehicle, and I have used the standard milage deduction the entire time. Since I am new to TurboTax this year the depreciation for the prior years the vehicle was in use is not available for TurboTax's to reference. I am using the TurboTax Home and Business 2025 desktop edition.

 

In 2019 the purchase price of the vehicle was 29,836.96  (business in 2019 was 51.1%)

As mentioned, the business use has varied but the percentage over the life of the vehicle was 38% (however in 2025 the business use was only 1.71%)

I have calculated the Depreciation (using the standard mileage depreciation component) over the life of the vehicle as $12,038.10.

The vehicle was "sold" in 2025 for an $8000 (trade-in credit)

 

So from everything that I am looking at in the formulas/depreciation recapture is saying the adjusted basis of the vehicle would be (cost - depreciation) $17,798.86

Then the business portion of the adjusted basis should be (adjusted basis x business use percentage) $6,793.41 and the business portion of the sale would be $3,053.60

This seems to indicate that the business portion of the sale minus the adjusted basis of the vehicle would wind up in a loss and there shouldn't be any depreciation re-capture.

 

However; when I follow the instructions to enter the vehicle information TurboTax is showing almost the entire business portion of the sale as a gain.

 

What is wrong here and how do I enter the information need to make sure everything is correct?

 

1 reply

Mike9241
Level 15
Level 15
March 1, 2026

Turbitax is not great at handling sales of vehicles with both personal and business use especially when they vary from year to year

 

i think the proper computation is

cost 29837

times business use 38%, which should be the total business mileage divided by the business mileage

equals 11338

reduce by depreciation but not below zero so since your depreciation is more than the business cost you have zero basis

8000 time the business percent of 38% = 3040 your taxable 1245 recapture (ordinary gain)

 

29837 * 62% personal portion  18499

personal proceeds 8000 * 62% 4960

sio you have a non-deductible loss on the personal portion

 

Mike9241