Your purchase contrasted to your zero sales price will give you a loss. However, even with standard miles, you have to calculate depreciation.
Yes, when you are selling or trading in a business vehicle, you must adjust your adjusted basis for depreciation allowed or allowable and if you used the standard mileage rate, you must adjust the basis for the allocation depreciation amount per mile for all business mileage deducted.
Depreciation component of standard mileage rate.
For computing the taxpayer’s basis in an automobile, the standard mileage rate has a component that represents depreciation.
For 2021, the depreciation component is 26¢ per mile.
If the actual expense method is used in any year after the standard mileage rate method has been used, the straight-line method of depreciation must be used. (Rev. Proc. 2004-64)
Depreciation Component of the Standard Mileage RateYear.....................2020..........2019..........2018..........2017..........2016
Rate per mile................27¢............26¢...........25¢............25¢............24¢
Note: These rates do not apply for any year in which the actual expenses method was used
X For additional information refer to the following link:
depreciation component of standard mileage rate
