How do I enter the disposition of my business vehicle if it was in an accident and considered a total loss?
The loss of a business vehicle is considered a sale, for tax purposes. Whatever the insurance gave the customer for the vehicle is the sales price. This section details the steps the customer should follow to report this.
The customer will:
- Select Review on the Vehicle section of the business activity.
- Write down all depreciation used for all prior years and the current year.
- Go through the vehicle section until you reach the Do any of these apply to the vehicle? screen.
- Optional: Select Your percentage of business use of the vehicle varied over the years.
- Important: Only select this option if you used the vehicle less than 100% of the time for business.
- Select Continue.
- Select I converted this asset to nonbusiness use (date).
- Select Continue.
- Finish the Vehicle section.
- Go to the Federal tab and the Other Business Situations section.
- Select Sale of Business Property.
- Enter the sale of the vehicle.
You are looking at about 6K of 'Other Income', with the remaining Cost Basis of $3195, subtracted from half the insurance proceeds of $9917.
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