How do I remove a vehicle I no longer own or use for my mobile notary business? It asks for the date i stopped using it but then tells me to go back and uncheck the box

[angela3950]

This is what I see:
Tell us about the owner of this Honda Civic

I own this vehicle. Learn more
I lease this vehicle. Learn more
This vehicle isn't mine. Learn more
If you didn't own or lease this vehicle last year, please select Back and uncheck the box next to I stopped using this vehicle.
It's making me go in circles-Angela

[JamesG1]

Has the vehicle been sold in 2021?  Has the vehicle been sold prior to 2021?  Or is it just not being used in this business activity?  Is the business activity still in operation?

If the vehicle has been sold in 2021, go back to the screen Here's what we have from last year and click I stopped using this vehicle in 2021.  Then enter the date of sale.

If the vehicle was not sold in 2021, what happened to the vehicle?  Please clarify.

[ke6gyd]

I sold the vehicle in July of 2022 that was in use since 2001.  Am not claiming use of another vehicle as the part time business is very sporadic at this point in time and don't need the deduction.     If I just delete the vehicle, seems the federal review is happy, but the state review still asks for info regarding the vehicle.  How do I delete the vehicle from being flagged in the State Review?

[ke6gyd]

Additional:  When I checked the box, "I stopped using this vehicle in 2022" put the date in.  Then the next page doesn't give me the option that I no longer own this vehicle.  Only,  "Yes I own, No I lease, or This vehicle isn't mine."  If I check "isn't mine" it still takes me to entering mileage, but no option to delete or just take expenses.

[DianeW777]

The correct action is that you have taken this vehicle out of service (sold, disposed of, etc). For tax purposes, when it was sold you have created a taxable event.  The information below will show what to select so that the vehicle will not come up again and this starts at the federal return. There is a difference in calculating the sale based on whether you used only the standard mileage rate or actual expenses or both. Since you used it since 2001 (?) it is likely fully depreciated.  If this is the case you will have a gain and you must report the sale as well. 

The way to report the sale ( or trade-in, trade is not recognized by the IRS any longer for equipment or vehicles) is as follows. You have all the records so it should provide you the detail to move forward.

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 it self.
4. 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 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 the state return should reflect the correct changes.  See the depreciation portion of the standard mileage rate below.

@ke6gyd 

[ke6gyd]

OK, so I don't have all the records going way back, but this was a part time Entertainment use to haul equipment to and from gigs.  I figure that business use was 10% and personal use 90% over the life of the vehicle before sale.  I did use the standard mileage rate over the life of the vehicle.

What I'm still confused on is how to calculate the the Standard Mileage Rate of depreciation.  Do I just take the business miles for each year, then multiply it by the .xx per mile rate in the chart?  Then add all those years up to total the standard mileage depreciation? 

I'll have to take a best guess of the actual miles as my records don't go back that far.

Thanks

[ke6gyd]

I was able to find records going back to 2006 in .pdf's of my old returns.  I was able to estimate the older returns going back to when the vehicle was put in service in 2001.  Business use came out to be 6.9%.

I'm in the process of calculating the deprecation mileage now.

Thanks

[AmyC]

Yes, the business mileage for each year times the rate per mile. Total it up and subtract it from the purchase price to get your current basis.

Reference: Publication 551 (12/2022), Basis of Assets - IRS

@ke6gyd 

[ke6gyd]

Got it re: the basis.  Question.  If the vehicle, over the life of it since 2001, was only used 7.6% of the total miles on the vehicle miles for business, would the basis take that that into account? In other words, originally, the vehicle cost $35000 when purchased new and business use was first started.  Could the original basis be on 7.6% of the original purchase price.

[KrisD15]

No, you use the original basis of 35,000 and if there is a gain or loss, TurboTax  will only report 7.6% of the gain or loss as a business gain or loss. 

However, there will also be (or only be) Depreciation Recapture, and that is not limited by the percentage it was used for business. 

When you sell a business asset, there might be capital gain if it is sold for more than you purchased it for. That usually does not happen with a vehicle. 

There could be a loss if you sell for less than the "adjusted basis" and if that happens, only the business portion of the loss could be claimed. The personal portion would be forfeited. 

When you sell a business asset, you usually DO need to "pay back" some of the depreciation you took (or could have taken) and that is done by reporting the amount as income. 

So if you bought the vehicle for 35,000 and always took the Standard Mileage method, lets say the depreciation portion of that mileage comes out to be 30,000.

That means your adjusted basis is 5,000. 

(it does not matter to the IRS if you never took depreciation, they make you pay back what you took or what you could have taken)  

So if you sell for 5,000 or less, there would be no depreciation. 

Sell for 5,001 to 35,000 and the amount over 5,000 is depreciation recapture and reported as ordinary income. 

As an example, if you sold it for 40,000, 30,000 would be depreciation recapture (ordinary income) and 5,000 would be capital gains.  

If you sell for only 4,000,,,,,,,  7.6% of 1,000 would be a business capital loss 

@ke6gyd