Sale of Business Vehicle, taxable gain

[sweetipie15]

I financed a brand new truck (no trade-in) on November 1, 2021 for $71,208.

I drove it 23,063 miles before year end when the transmission blew.

Due to truck shortages, there was no parts, limited labor, and no similar truck size "loaner" vehicles, we were forced to trade it in to keep rolling. Traded in on January 30, 2022 for another brand new truck. 

On our 2021 taxes, we only took standard mileage depreciation (23,063 x $0.56/mile = $12,915 depreciation.) Fast forward to know 2022 tax year where I am entering the "sold" details.

I was given $68,000 for trade-in.

My impression is that original purchase price $71,208 - depreciation taken $12,915 - sold price 68,000 = would be a $9,707 taxable gain; however, Turbotax is calculating taxable gain of $68,000 and I do not know how to fix this. HELP!

[Mike9241]

the standard mileage rate IS NOT entirely depreciation it covers operating costs like gas, oil and insurance 

the actual depreciation  (regular and AMT) you took based on IRS pub 463 page 24 is 26 cents per mile ($5996 if my math is correct) which must be manually entered. Turbotax does not calculate depreciation when the standard mileage rate is used. THERE IS A BUG in Turbotax since the beginning and ending mileage are the same Turbotax computes 0% business use. Then it completely ignores the cost and depreciation entered (MODS). the way around this is to enter ending mileage 1 mile higher. then it computes 100% business use and correctly calculates the gain

assuming my math is correct

71208-5996= 65212 = basis

sales price 68000

gain 2788

not sure why you took standard mileage in 2021 since 179 depreciation and/or special depreciation would have allowed a greater deduction (minimum over $18,000 depending on the class of the truck). in addition, you could have deducted other expenses like gas, oil and insurance. but then you would have had a bigger gain in 2022