Multiply the number of miles you claimed for all the years it was used as a business vehicle (in your case only 2022) by the depreciation equivalent for that year (in your case .26)
Enter that amount as both Prior Depreciation and also as Prior AMT Depreciation.
Because you used the STANDARD MILEAGE RATE the first you you placed it into service in 2022, you reported miles driven and expensed the amount allowed per mile. Depreciation was not taken separately. You will not find a depreciation schedule for tax year 2022.
Now for 2023 you want to use the ACTUAL EXPENSES METHOD, so for tax year 2023, depreciation will be calculated and reported separately.
Depreciation is used because when you make a large business purchase, like a vehicle, you assume it will lose value over time, not just the first year. Depreciation subtracts a portion of value each year until the value goes down to zero.
In order to subtract equal portions, the program needs to know what the value balance is.
If you had been using the actual method, and you claimed 2,300 depreciation on a vehicle with a basis (value) of 11,500, the adjusted basis would be 9,200 (11,500 - 2,300)
BUT you used standard mileage.
The Standard Mileage Rate has a "Depreciation Equivalent" built into it. For Tax Year 2022 every mile you claimed has .26 worth of depreciation equivalent. You must find the depreciation by multiplying the number of miles by the depreciation equivalent of that year.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
