Car adjusted basis potentially incorrect. How do I do this?

[tigr_ldy]

TT Deluxe Desktop version: I owned a car since 2021.  I sold it this year half way through the year.  I traded it in for 20000.  I bought it for 30054.  I used it for 7.28% of the time for business.  I tracked my mileage every year and used standard mileage deduction. 

Adjusted bought price 2188

Adjusted sell price 1600

Depreciation (from mileage calcs each year) 1130  -It also tells me depreciation allowed is 1239 (might be some limit ), but this is still close to 1130. 

The gain should then be approximately 398$.

TT is telling me my gains are $1349 ordinary and $251 long term gain.   ACK...that doesn't seem right at all - or am I missing something?

I've read that TT doesn't calculate variable use each year.  Maybe that is the issue? Do I then click to convert to 100% personal use, and then just use property disposition?   Can someone provide me with a few more detailed steps to get this right - or is this a hiccup that needs to be fixed in TT?

[DianeW777 · Accepted solution]

To show a sale of your vehicle with various business use percentages the best and easiest way to do that is by using the following steps. The first set is to show how to arrive at the business use percentage (you seem to understand this portion).

1. Total all of the business miles for the life of the vehicle
2. Total all miles on the vehicle for the life of the vehicle
3. Business miles divided by total miles = Business Use Percentage for the life of the vehicle
4. Take the original cost of the vehicle x the business use percentage = Business Cost
5. Take the sales or trade-in price x the business use percentage = Business Sales Price
6. Calculate all of the business miles by year with the rate in the SMR for depreciation (chart attached) to arrive at the total depreciation considered used by the IRS.
7. When you go through the vehicle information be sure to select 'Sold, disposed of, etc....' then do not indicate it was sold.  You must say 'Yes' it was converted to personal use.  This will eliminate any sales information in the vehicle it self.
8. Once you have completed the information in that section you will follow the steps below to enter your sale:
   1. Go to Less Common Business Situations
   2. Scroll to Sale of  Business Property
   3. On the next screen select Any Other Property Sale
   4. Use the information from step 3 and the depreciation from step 6 to complete your sale
   5. Select Sales of business or rental property that you haven't already reported.
   6. Answer 'Yes' to Do all of the following apply...?
      1.  Description of the Property (Vehicle make/model/year)
      2. Sales Price/Sales Expenses 
      3. Date acquired and date sold
      4. Cost
      5. Depreciation
9. If the personal portion of your vehicle is a loss there is nothing to report for that portion of the sale/trade. 

 Annual Depreciation Component Breakdown (for more years see the chart in IRS Pub 463)

• 2025: $.33
• 2024: $.30
• 2023: $.28
• 2022: $.26
• 2021: $.26

@tigr_ldy