Thanks Coleen!
I just looked at Form 4797 and it seems to be for property, would a franchise with no physical property changing hands still be reported on this form?
I'll have to look back at previous years taxes and try to figure out the car situation, but this particular car was put into service in 2017, the previous partial business-use vehicle which was put into service in 2014 was totaled due to an accident.
Interestingly, looking back at our 2017 tax forms, the only related items included by TurboTax was an additional page that showed the dates of being put into service and the 2017 mileage for both vehicles and a Form 8824, which, now that I look at the numbers, is probably incorrect and brings up another question. The numbers I have on the 8824 are the basis of the totaled car and what looks like the price of the new car. What I would expect to see are the basis of the totaled car and the insurance payout for the totaled car, so that should have been a pretty big loss. I'm not sure that the new car would even come into play here. So, the question is: how would you normally report the loss and replacement of a partial-business-use vehicle while receiving a cash payout from insurance.
Edit: While looking at other forum posts, I see some confusion about whether or not milage can be deducted for independent subcontractors. I am also confused, but maybe I don't need to convert this vehicle to personal use of we can still deduct mileage. Here's our current situation (after the franchise sale): my wife teaches fitness classes part-time for franchise owners, but she will still be maintaining a home office as her primary place of business. The home office was set up by a tax professional years ago when she was in the same situation she is now (i.e. a subcontractor) and has not changed. As for the mileage deduction, the tax instructions were pretty clear that the deduction was allowed when she was a franchise owner as one of the examples was someone traveling from their "primary place of business" to a "place they rented" to do business and back. But now she travels from her "primary place of business" to wherever the franchise owner rents and back. So, is the standard mileage deduction still allowed?
