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Business & farm
It appears you understand the prior depreciation calculation. It may be best to take remove the car from service by saying converted to personal use on the specified date. This way TurboTax is not looking for sales information in the vehicle asset.
Next report the sale as follows using only the business use percentage for sales price, depreciation and date acquired.
- All business miles for all years and then total miles for all years - divide business miles by total miles to arrive at your overall business use percentage for the life of the vehicle. You will use this percentage times the selling price (trade-in value) to arrive at the business selling price. Use the same percentage to arrive at your business portion of the cost before depreciation.
- Calculate the standard mileage rate depreciation portion for the business miles each year (you have already done that).
- When you enter the vehicle information be sure to select 'Sold, disposed of, etc....' then do not indicate it was sold. You must say 'Yes' it was converted to personal use. This will eliminate any sales information in the vehicle it self.
- Once you have completed the information in the vehicle section you will follow the steps below to enter your sale:
- Go to Less Common Business Situations
- Scroll to Sale of Business Property
- On the next screen select Any Other Property Sale
- Use the information indicated and the depreciation from step 2 to complete your sale
- If the personal portion of your vehicle is a loss there is nothing to report for that portion of the sale. If it is a profit then you must report that as a sale of investment property.
Please update if you need further assistance and include additional details, then one of our tax experts will help.
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March 28, 2023
1:21 PM