@Opus 17 wrote:
Suppose the car cost $20,000. You claimed 5000 miles of business use over the years, that's about $1250 of depreciation. (You need to determine the exact amount based on the mileage and depreciation value for each year that mileage was claimed.) The depreciation reduces your cost basis from $20,000 to $18,750. If you sell for less than your adjusted basis, there is no gain to report and nothing to recapture.
It is more complicated than that. The sale is treated as two separate transactions, personal and business.
For example, let's say the average business percentage over the time was 10%. In that case, the $20,000 vehicle is treated as a $18,000 personal vehicle and a $2000 business vehicle. So after factoring in $1250 of depreciation, the business Basis is $750.
If the vehicle was sold for $10,000, that would be treated as a sale price of $9000 for the personal portion of the vehicle, and a sale price of $1000 for the business portion of the vehicle. So that would would result in a $250 taxable gain for the business portion of the vehicle.
