depreciation for otr truck sell raising agi

[ServantOne7]

I have had a Freightliner Cascadia for three years. Straight-line Half-year convention. I sold it in Jan 2019 and started leasing. I took a loss of a little over 17,000, which the company rolled over onto the lease payments. I use turbo-tax home and business. The software handled the sale and gave me a loss in the sale area, but it pasted all of the accumulated depreciation onto the agi. I took a loss, to why is the software treating it like a capital gain and adding the entire original price of the truck to my adjusted gross income. How can I fix it? Where do I go in the forms and what do I enter to fix it? Do I include the entire price of the truck in the business loss portion? If I need to post more info here, please let me know.

[JamesG1 · Accepted solution]

The software appears to be reporting the transaction correctly.

IRS publication 544 page 27 Depreciation Recapture states:

"If you dispose of depreciable or amortizable property at a gain, you may have to treat all or part of the gain (even if otherwise nontaxable) as ordinary income."

The gain or loss is reported on IRS form 4797 Sales of Business Property.  You should be able to review this form in your tax return and verify the numbers.

I suspect that the transaction was reported on page 2 Part III and the transaction was reported on lines 20 through 25.  The Freightliner was likely reported as 1245 property.