There are two situations when you have to recapture Section 179 depreciation. 1) Sale: It is figured on Part III and goes to 1040 Line 14. 2) Listed property usage drops below 50% and is no longer categorized as business property. This would be Part IV and go back to Schedule C which would then increase your limitation on Line 11. In the event of a sale, it is not added to your Schedule C because you are not considered to be in the business of selling cars.
