Subject: Traded a farm use vehicle in 2022 which only used standard mileage deduction
Purchased: 2018 @ $37,755 (was lower if consider the trade on a standard mileage deduction from before this)
Traded: 2022 @ $32,000
Checked:
- I stopped using this vehicle in 2022, added the date for that.
- I owned this vehicle
- Yes, this vehicle was available for personal use
- No, I didn’t have another vehicle available for personal use
- Yes, I tracked my work miles for farm
- No, I didn’t track personal stuff files
- I’ll enter my beginning and ending reading for 2022
- Began 48,000
- Ended 50,000
- Miles 1/1 – 6/30 was 806
- 0-4 vehicles
- I’ll stick with standard mileage deduction
- Your percentage of business use varied over the years
- 806 in 2022 (TT says will add for me)
- 4,456 miles @ .26 in 2021
- 3,308 miles @ .27 in 2020
- 2,945 miles @ .26 in 2019
- 2,761 miles @ .25 in 2018
- $3,505.43 Prior depreciation and 26.922% average business use
- No, I didn’t convert to nonbusiness use
- Sale Price (prompts me to enter 10.08% of the $32,000 trade value)
- I noticed when trying things if I had not used for business in 2022 it would go from 10.08% to 0%
- This Sale Price seems a key driver in the end result
- If take 26.922% of $32,000 have $6,999.72 so entered since says take it by the business use percentage
- There were not expenses in the sale
- It looks like this value causes a $6,909 gain at the end but I only saved $7,965 over the 1st 4 years for standard milage expense, so that seems odd I would have a gain since I didn’t gain on the sale and only deducted $7,965 from using the vehicle over the years (fyi, I do not use Schedule C)
- Vehicle Cost (Used $37,755 since was price without the trade on this one in 2018)
- If I got this vehicle by trading enter Basis for gain/loss (enter 100% of basis) so used $37,755 (since like above traded in 2018 and didn't add anything significant or depreciate annual at any year)
- Enter the depreciated equivalent (Used the $3,505.43 from 2018-2021 above)
- My gain is $6,909 but I don’t understand this and why a gain when sold for less than purchased
The TT guidance is not clear and even the Publication 225 document from IRS site doesn't clarify.
