No, you use the original basis of 35,000 and if there is a gain or loss, TurboTax will only report 7.6% of the gain or loss as a business gain or loss.
However, there will also be (or only be) Depreciation Recapture, and that is not limited by the percentage it was used for business.
When you sell a business asset, there might be capital gain if it is sold for more than you purchased it for. That usually does not happen with a vehicle.
There could be a loss if you sell for less than the "adjusted basis" and if that happens, only the business portion of the loss could be claimed. The personal portion would be forfeited.
When you sell a business asset, you usually DO need to "pay back" some of the depreciation you took (or could have taken) and that is done by reporting the amount as income.
So if you bought the vehicle for 35,000 and always took the Standard Mileage method, lets say the depreciation portion of that mileage comes out to be 30,000.
That means your adjusted basis is 5,000.
(it does not matter to the IRS if you never took depreciation, they make you pay back what you took or what you could have taken)
So if you sell for 5,000 or less, there would be no depreciation.
Sell for 5,001 to 35,000 and the amount over 5,000 is depreciation recapture and reported as ordinary income.
As an example, if you sold it for 40,000, 30,000 would be depreciation recapture (ordinary income) and 5,000 would be capital gains.
If you sell for only 4,000,,,,,,, 7.6% of 1,000 would be a business capital loss
@ke6gyd
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