dep allowed/allowable too large. depreciation cannot exceed business basis

[gansu911]

part time vehicle usage since 2017. traded in and the software won't allow me to file.

purchase 2017 $26000, immediately placed in part time business usage using standard mile deductions. traded in 11/2023 for $9500 (18.33% usage, $1741 business portion).  

i've gone through depreciation per IRS schedule for mileage x depreciation for the last 7 years. Comes to be 4766. AMT allowed/allowable 840. Gain or loss 1741. 

how do i fix the depreciation allowed error code so that i can file? 

[DianeW777]

It depends.  Based on your information the cost basis for business is $4,766 (.1833 x $26,000) and the selling price business portion you calculated at $1,741.

The depreciation portion of the standard mileage rate (SMR) would be that rate each year times the business miles each year of business use.  Double check your depreciation figures. It's not clear if you used the actual depreciation expense each year or the SMR.  If you did happen to use the SMR you would need to calculate the depreciation using the information in the chart below (rate x business miles each tax year). If actual depreciation was used each year for the business use percentage you would have to get that from your prior tax returns for a grand total of actual depreciation expense used on your tax returns.

                                      

To record your vehicle sale you can use the instructions below to record your sale.

1. All business miles for all years and then total miles for all years - divide business miles by total miles to arrive at your overall business use percentage for the life of the vehicle. You will use this percentage times the selling price (trade-in value) to arrive at the business selling price. 
2. Calculate the standard mileage rate depreciation portion for the business miles each year if that is the method you used for the expenses each year.  If not use the depreciation you actually deducted each year your vehicle was used for your business. 
   •  A portion of the standard mileage rate is considered depreciation.
3. When go to the vehicle information under your business you can 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 itself.
4. Once you have completed the information in that section you will follow the steps below to enter your sale:
   1. Go to Other Business Situations
   2. Scroll to Sale of  Business Property
   3. On the next screen select Sales of business or rental property that you haven't already reported
   4. Use the information from step one and the depreciation from step 2 to complete your sale
5. If the personal portion of your vehicle is a loss there is nothing to report for that portion of the sale/trade.  

Once this is completed your sale will be recorded properly on your return. The image below is the correct selection for this sale.

[gansu911]

1. 2017-2023: total miles = 104500, business miles = 22000, % usage 21.05 * 26000 = 5473 cost basis

2. depreciation portion (2017-2023): 1000,875,910,810,520,780,840; sum = 5735 depreciated

I've never depreciated the vehicle or took a section 179 deduction to begin with. I bought the car and had some business use. It was never above 50%. I've only taken annual standard mileage deductions. The vehicle was traded in, and the dealer gave me 9500 for the trade in. this is a small passenger vehicle and was traded in for a small passenger vehicle, so it shouldn't qualify for the business expense.