in my opinion you have 2 casualty losses. one is the personal portion of the vehicle and the other is the business portion. i would take the $5,000 and split it based on business mileage to total mileage the rest would be the personal portion. split the insurance proceeds in same proportion. if you have a personal portion gain, it will be taxable. (kind of doubt this will happen) . a personal casualty loss is not deductible. the basis allocated to the business portion must be reduced by depreciation. each year the standard mile rate includes a cents per mile deduction for depreciation, you can get this amount by going to IRS website and downloading publication 463 - look at page 23 for 2018. what if the standard mileage depreciation reduces basis below $0. The instructions in the pub say don't go below $0.
