First, you have used up all depreciation on this business use vehicle because of the life of the vehicle.
Your business use percentage of the original cost basis and depreciation expense used over the years should equal when entering the sale. You must report the full business percent of the sales price as ordinary income. The business percent of cost basis and actual business depreciation used can be the same amount so that TurboTax will tax the full business portion of gain appropriately. The key is that any amount of gain that equals or is less than the depreciation taken will be taxed as depreciation recapture and not capital gain.
- Taxable gain: $2,905 gross sales price (maximum should be the business use percentage x actual sales price)
- You are not required to report as gain more than you actually received from the sale for the business portion, regardless of the total depreciation claimed.
The personal portion of the vehicle is assumed to be a loss and therefore is not reported.
@Geoff30
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