You did sell it, it's the same for tax purposes. You "sold" it to the repo company for the amount of the outstanding loan balance. That's your selling price.
For example, you purchased the car with a $20,000 loan. You stopped making payments. The outstanding balance of the loan was $15,000. The car was repossessed and you were dinged for a further deficiency of $3000. That means you "received" $12,000 as the selling price.
Now, if you "sold" the car for less than your adjusted basis, you will have a loss on the business, but if you sold it for more than your basis, you will owe depreciation recapture. It's just the way of things. Did you take a section 179 or other type of accelerated depreciation? You do owe tax now. You took a deduction before, that you need to repay. If you were doing normal depreciation, you might have a gain or loss, depending on the amount of business use and depreciation you previously claimed. Turbotax won't be able to give you an accurate picture of how the repossession affects your taxes until you give it all the facts.
