Business Asset now used 0 percent - Recapture calculations?

[hendis4289]

I am seeing a problem I don't know how to handle.

Years ago, I started a newspaper home delivery route. By early 2018,  I was using 2 vehicles - vehicle A at >90% biz use, and vehicle B at >50% biz use. As of January 2020, however, my delivery route got smaller, so that 2 vehicles were not needed any more. That means that the biz use of vehicle B went to 0%. Now TurboTax Home & Business (TTHB), which I have used exclusively since I started delivering newspapers, is asking me about "Recapture" and "Section 179".

Needless to say, I am lost.

However, I know that if I don't get this right, the IRS will audit me in several years, and will happily sell my soul to rectify my mistake regardless of whether it was intentional or not The total sum of depreciation and Sec. 179 deducted for both vehicles since purchasing vehicle B is about $50.00. (Yes, I know that I probably left money on the table.) If I need to add to current income the total of all depreciation + Section 179 amounts previously deducted during my ownership of Vehicle B, I will do so to make this problem go away.

What information do I need and where do I find it? Then, once I have the information that I need, what do I do with it to make the IRS (and TTHB) happy?

hendis

[ColeenD3]

The easiest thing to do might be to amend and get rid of the problem that way. Section 179 looks great up front but not so great later on. Please see this answer from MichaelL1.

Yes, you can make the election as long as Amended return is filed within the prescribed time limits (3 years from due date of the return).

For property placed in service in 2018, file Form 4562 with either of the following.

• Your original 2018 tax return, whether or not you file it timely.
• An amended return for 2018 filed within the time prescribed by law. An election made on an amended return must specify the item of section 179 property to which the election applies and the part of the cost of each such item to be taken into account. The amended return also must include any resulting adjustments to taxable income.

Narrative says 2018, however it also applies to prior year returns. This is just from the 2018 IRS Tax Publication 946.