Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 3
posted Jan 30, 2023 10:48:08 AM

Recapture

So if you convert a fully depreciated vehicle to personal use and the business is closed how would the recapture ever take place without having a business?   

0 1 143
1 Replies
Expert Alumni
Jan 30, 2023 11:05:16 AM

Depreciation recapture is reported as ordinary income. 

It will be on your Schedule 1 line 4.

 

The recapture will happen when you finally sell the vehicle. 

 

NOTE:

If you sell a business vehicle at a loss when in business, the depreciation is recaptured as ordinary (personal) income, but a business loss can also be taken on the sale. 

If you switch it to personal use, and sell it later at a loss, the depreciation recapture is again ordinary income, but the loss is disallowed since it is now a personal asset.