I'm not a tax expert but I'm confused by something you wrote:
The dealership offered me $500 for my old car. I used it 24.71% in 2020, meaning $124 applied as a business gain, which I entered.
Then, I get taken to a screen that asks me about "vehicle Cost". I am assuming this was the original cost of the vehicle, when I bought it in 2008, so I entered that cost of $35000. I then got a screen to determine basis of loss/gain. I originally bought this car for $35000, and traded in a car that was worth $23000 (new in 2003), so I list my gain as $12000. The next screen asks me for my prior depreciation equivalent, which is $31116. The next screen tells me that my Gain on Sale is $124.
There should be three boxes to fill in: Sales Price, Cost/Basis, and Depreciation Taken.
You bought the car with a list price of $35,000 but paid $35,000-23,000 for a purchase price of $12,000? Is that correct?
If so, then based on what @AmeliesUncle suggested I do to my car, this is what I suggest to you:
The first step is to calculate for a loss:
Sales Price = $376.45 (or 500 x 75.29%)
Basis = The depreciated cost of your car when you began using it for business multiplied by 75.29%. I'll use $8,000 for this example, so the math is 8000 x 75.29% = $6,023.20
Depr Taken = $6,023.20 (as this can't be greater than the Basis)
^^ This says that your basis is greater than your sales price, so you don't have a loss.
The next step is to calculate for a gain:
Sales Price = $124 (which is 500 x 24.71%)
Basis = $2,965.20 (which is 12,000 x 24.71%)
Depr Taken = $2,965.20 (because this can't be greater than the Basis)
When I go to my main page of income and expenses, it lists the "Sale of Business Property" as $5808. Nobody can tell me why that number is popping as income, and nobody can tell me what I am entering wrong. Can you help?
Try the math above, then let us know if the income page shows the same 5808.
