Tax Year Prior to 2020: Sale of biz vehicle showing as a (taxable) gain and should be a loss?

[JamesG1]

You may be able to find more information in the Car and Truck Expenses Worksheet which should report the depreciation component of the standard mileage rate as described by @HopeS above.

In the online versions, you may view or print at Tax Tools / Print Center / Print, save or preview this year's return / Include government and TurboTax worksheets after you have paid for the software.

In the Desktop versions, one can look at the tax return by clicking FORMS, or by viewing the PDF through the Print Center.

I assume that line 21 is the cost less the depreciation to date equals basis.  Presume there were no expenses of sale.

Line 22 is depreciation allowed or allowable which is recaptured.  See Instructions for Form 4797 page 8 and 9 which says:

Line 22

Complete the following steps to figure the amount to enter on line 22. 

Step 1

Add amounts such as the following. 

• Deductions allowed or allowable for depreciation (including any special depreciation allowance...

@jack73 

[jack73]

I guess I must be dense. @JamesG1  and @HopeS keep telling me that I need to calculate my depreciation, but I have done this using the mileage and year tables, and have included them in my post.  What am I missing that makes you guys not think it's been done?

I'm using the desktop version. It asks for business portion of the sales price. It asks for the amount for which the vehicle was purchased. It asks for the mileage-based depreciation (ei: $0.25/mi in 2018, $0.26 in 2019,etc...).  Then it fills in form 4797 (yes, I even posted thr form fields that TurboTax filled in).

From earlier post:

Sales Price (Business Portion Only): $2176  (vehicles used for business 14.5% of the total mileage)

Vehicle Total Cost (doesn't ask for Business Portion Only, so this is price paid): $17,977
Basis for gain/loss (enter 100% of basis): Blank, because it was not acquired via trading in listed property, and in the initial year, it was for personal use
Prior Depreciation Equivalent (used mileage based expensing): $1,335
Installment Sale: No

"Your gain is $2176"

Looking at Form 4797, it shows:
Line 19a: VehicleX Acquired 6/30/2016, sold 8/6/2022
Line 20: Gross Sales Price: $2,176  (this is the amount I entered as Business portion of the sale)
Line 21: Cost or other basis plus expense of sale: $895  (I did not enter this anywhere)
Line 22: Depreciation (or depletion) allowed or allowable: $895 (I did not enter this anywhere)
Line 23: Adjusted Basis.  Subtract line 22 from line 21: $0

Line 24: Total gain. Subtract line 23 from line 20: $2176


So, how is TurboTax calculating lines 21 and 22?

[DianeW777]

It appears you understand the prior depreciation calculation. It may be best to take remove the car from service by saying converted to personal use on the specified date. This way TurboTax is not looking for sales information in the vehicle asset. 

Next report the sale as follows using only the business use percentage for sales price, depreciation and date acquired.

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. Use the same percentage to arrive at your business portion of the cost before depreciation. 
2. Calculate the standard mileage rate depreciation portion for the business miles each year (you have already done that).
3. When you enter 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. 
4. Once you have completed the information in the vehicle 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 indicated 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.  If it is a profit then you must report that as a sale of investment property.

Please update if you need further assistance and include additional details, then one of our tax experts will help.

@jack73 

[jack73]

@DianeW777  This worked perfectly!  Thanks!