Business & farm
When you say 'work mileage', it would seem you took the standard mileage rate instead of actual expenses that would include depreciation. The standard mileage rate does have a portion that is considered depreciation and must be accounted for on sale. Below are steps to enter your sale of the vehicle and how to remove it from your return for the future. It is a two step process once you have all your numbers.
The way to report the sale ( or trade-in, trade is not recognized by the IRS any longer for equipment or vehicles) is as follows. You have all the records so it should provide you the detail to move forward.
- All business miles for all years and then total miles for all years - divide business miles by total miles all years to arrive at your overall business use percentage for the life of the vehicle. You will use this percentage times the selling price (or trade-in value) to arrive at the business selling price.
- Calculate the standard mileage rate depreciation portion for the business miles each year if that is the method you used for the expenses each year.
- A portion of the standard mileage rate is considered depreciation (see below).
- When go to the vehicle information under your business you can select 'Sold, disposed of, etc....' then do not indicate it was sold. You must say 'Yes' it was converted to personal use. This will eliminate any sales information in the vehicle itself.
- Once you have completed the information in that section you will follow the steps below to enter your sale:
- Go to Less Common Business Situations
- Scroll to Sale of Business Property
- On the next screen select Any Other Property Sale
- Use the information from step one and the depreciation from step 2 to complete your sale
- If the personal portion of your vehicle is a loss there is nothing to report for that portion of the sale/trade.
Once this is completed the state return should reflect the correct changes. See the depreciation portion of the standard mileage rate below.
