Self employed

Please provide your state so that I can review the return, should you still need it after the instructions below.

The vehicle that was traded can be taken out of service using the steps provided. Keep all records associated with the new business vehicle until you dispose of it through sale, trade or junk.  At that time there will be a taxable event.

When reviewing your vehicle information be sure to select your vehicle was 'Sold, disposed of, etc....' then do not indicate it was sold. 'Your percentage of business use of the vehicle varied over the years.' Next select Yes 'Did you convert the asset to nonbusiness use? This should eliminate any sales questions and it will calculate the appropriate depreciation based on the date you remove it from service. 

Open your TurboTax Desktop return

1. Select Business Income and Expense
2. Edit beside your business or rental activity
3. Select Business Vehicle > Edit
   1. For TurboTax Online: Edit beside your business or rental activity > Under Expenses/Assets select Edit beside your vehicle
4. Enter the date you stopped using this vehicle
5. Continue to  the screen 'Do any of these apply to your vehicle?'
6. Select 'You started using it as a personal vehicle 100% of the time at any point in 2024'
7. Yes > Did you convert this asset to nonbusiness use?
8. Continue and you will finish your vehicle screens.

The way to report the sale (trade is not really recognized by the IRS any longer for equipment or vehicles) is as follows. You have all the records so it should provide you the detail to move forward.

1. 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. 
2. If you used actual expenses, write down all prior depreciation and the current year while following the steps above.
3. If you used the standard mileage rate (SMR) you must calculate the depreciation portion of those miles using the chart below (can be found in IRS Publication 463 as well).
4. Once you have completed the information in that section you will follow the steps below to enter your sale:
   1. Go to Less Common Business Situations
   2. Scroll to Sale of  Business Property
   3. On the next screen select Any Other Property Sale
   4. Use the information from step one and the depreciation from step 2 to complete your sale
5. If the personal portion of your vehicle is a loss there is nothing to report for that portion of the sale/trade. If it is a gain it must be reported.

For TurboTax Online - use these steps to report the sale.

Next enter your Sale of Business Property (do not enter any sales information in the vehicle asset)

1. Income at the top
2. Scroll down to Other Business Situations
3. Select Sale of Business Property
4. Select Sales of business or rental property that you haven't already reported.
5. Answer 'Yes' to Do all of the following apply...?
6. Enter your sales information, do not make an entry for depreciation (no zeros)
   1.  Description of the Property (Vehicle made/model/year)
   2. Sales Price/Sales Expenses 
   3. Date acquired and date sold
   4. Cost
   5. Depreciation

@MandiBee 

@rcarr1575