What will I be claiming for income when I sell my car after deducting more depreciation than I paid for the car using the standard mileage deduction? I purchased the car for $25,000 and had $34,198 in mileage depreciation over 7.5 years. I sold the car for $1,000. So for income, am I going to be showing $1,000 for the sale or would it be the $1,000 + the $9,198 that I over claimed in depreciation? If different than both senarios, how much income will I be reporting? What will be the process filing this in Turbo Tax?
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It will be $1,000 (assuming it was 100% business use).
Your "Basis" can't go below zero, so that 'extra' $9198 is not factored into the sale.
Thank. I tried using chat gtp a couple times but it gave me $1,000 one time and the over $10,000 another. I've read several explinations and just counldn't fully understand
the standard mileage deduction is not entirely depreciation.
the depreciation included is listed in IRS PUB 463 page 35
https://www.irs.gov/pub/irs-pdf/p463.pdf
you are allowed to use the standard mileage rate even after the basis is reduced to zero by the depreciation
since the IRS says basis is zero your taxable gain would be the sales price assuming fully depreciated
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