The car used for business activity was purchased as a personal car back in 2011. Then in 2019 I started using it for my rental activity, which is multi-member LLC. Because I cannot report the mileage in the 1065 (Sch K), I have been reporting mileage expense in my personal return, and I have been taking a standard mileage deduction all these years. In 12/30/2022, I converted this vehicle to personal use. Turbo tax mentions that I may need to report recapture. As I have been taking standard mileage deduction, I did not depreciate the cost of the vehicle. Do I need to report recapture? All these years turbo tax calculated <3% as business use for this vehicle.
I purchased new vehicle on 12/30/2022 mainly for personal use which will also be used for the above-mentioned business. I did not drive this vehicle for business in 2022. There is no loan on this vehicle. Is there anything I need to report for this new vehicle?
When you use the standard mileage, part of the per mile rate is for depreciation. For example, in2020 the mileage rate was $0.575 with $0.270 for depreciation. You have to go back each year to find how many miles you used, then multiply it by the depreciation amount for the years you used the car. This amount is added to your basis to determine if you have to pay any tax when you sell the car. When you convert from business use to personal use, it is considered a disposition and you use the fair market value on the day you stop using the car to determine if you have gain. Any depreciation you took may be "recaptured" and added as income. If you can find your depreciation amount, go back through the TurboTax interview and it will tell you if you need to report.