Hello,
In March 2020 I purchased a 2002 Toyota Tacoma for $3,100, and spent about $2,000 in repairs over the next several months. I used the truck for work, and filed the standard mileage deduction for 2020-2022. In November 2022, I was in an accident that totaled the truck, and insurance paid me $7,100, which when adjusted by the percentage business/personal use came to about $6,450. When filing taxes this year, TurboTax asked me to calculate prior years depreciation based off of work mileage, and then limited this to the $3,100 purchase price. TurboTax is stating that I now have a $6,450 gain taxed at my normal income rate.
It seems that I am being charged for prior year deductions. Could someone explain this to me as if I were an intelligent third grader?
