Traffic Jam Hater
Returning Member

Which year do I report "sale" of Self-employment work vehicle totaled in 2023, insurance reimbursement received in 2024?

BACKGROUND:

2016-2023 - Used a vehicle for personal use and self-employment work.  Claimed standard mileage deduction each year.

Nov 2023 – Vehicle was totaled in collision.  Other driver was at fault.

Dec 2023 – Received notice from insurance company that they would reimburse me for value of vehicle.

Jan 2024 – Received insurance money as reimbursement for vehicle loss.

 

NOTE:

I used this vehicle for self-employment work from date of purchase until date of total loss (2016-2023).

I used the vehicle for personal and business use and kept track of the “work miles.”

I claimed the Standard Mileage Deduction on each year’s return.

I did not immediately replace the damaged vehicle; didn’t get another car until June 2024.

 

QUESTIONS:

  1. Since I stopped using the vehicle due to total loss in 2023, and received insurance reimbursement, I must report this as a “sale” on my tax return, right?
  2. If this does count as a “sale” for tax purposes, which return should I report it on….2023 (when I stopped using the vehicle due to total loss) or 2024 (when I actually received the insurance money)?
  3. If the “sale” should be reported on my 2024 return—even though I stopped using the vehicle in 2023—how do I answer the “Did you stop using this vehicle” question on the 2023 return?
  4. Regardless of which return I report the “sale of the vehicle” on, I will be required to calculate and enter the “business portion” of the “sale price.”  But do I have to report the remaining “personal portion” of the sale price elsewhere on the return?

 

Thanks!