It’s important to note that if you were audited, the IRS does not have to give you any deduction or adjustment that you can’t prove. If the car has been used for business, and if you don’t have records to show the amount of depreciation you claimed, the IRS could very easily decide that it has been fully depreciated and whatever you made on the sale should be treated as taxable depreciation recapture.
At an average new car price in 2004 of about $22,000, and an average of $.20 per mile for depreciation built into the standard mileage rate since then, you would only have to have driven the car 7500 miles per year on average for business in order to have fully depreciated it.
