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How did TurboTax arrive at DEPRECIATION ALLOWED AMOUNT, on SCHEDULE E WORKSHEET, (Part VII), Line 51, of $10.00 ??

How did TurboTax arrive at DEPRECIATION ALLOWED AMOUNT, on SCHEDULE E WORKSHEET, (Part VII), Line 51, of $10.00 ?

 

I sold a vehicle I partially used for my rental property for $400. I used the car 25% for the rental, so I entered $100 ($400 x 0.25) as the SALES PRICE. (I hope that is correct)? I purchased vehicle for $2500 in 2010. I figure it is fully depreciated, since I have been taking the standard mileage deductions every year. (I found the table that lists the depreciation per mile amount, of the standard mileage deduction, and am fairly sure I claimed all $2500 of the original purchase price with my 13 years of standard mileage deductions which include the depreciation allowance).

 

So, after using $100 as the 'BUSINESS PORTION OF THE VEHICLE SALE' in TT, somehow TT came up with $10 as the DEPRECIATION ALLOWED amount. TT then calculated $90 of additional income for me ($100 - $10 = $90). I guess that is correct?

 

I ran into many errors with Turbo Tax Federal REVIEW, so I am not sure I've accounted for the vehicle sale correctly? I need some assurance that I've completed this correctly.

 

I am including the screen capture of the part of the SCHEDULE E WORKSHEET BELOW: How did TT arrive at $10 on 51 of this WORKSHEET?

 

Screenshot 2024-02-21 at 17-57-02 TaxReturn.pdf.png

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7 Replies
PatriciaV
Employee Tax Expert

How did TurboTax arrive at DEPRECIATION ALLOWED AMOUNT, on SCHEDULE E WORKSHEET, (Part VII), Line 51, of $10.00 ??

Is this amount on Line 37 as Prior Depreciation? If you transferred this vehicle from last year this amount is brought forward from your prior year depreciation report. Line 37 flows to Line 51 (same for AMT depreciation if present).

When you question a number in a black font, right-click the number and choose "Data Source." This will bring up a box with a hyperlink to the form where that number was sourced. If the number is still black on that form, repeat the Data Source + hyperlink to follow the number to the next form.

 

If the box is blank, right-click and choose "About" for On-Demand Tax Help with more information.

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How did TurboTax arrive at DEPRECIATION ALLOWED AMOUNT, on SCHEDULE E WORKSHEET, (Part VII), Line 51, of $10.00 ??

The image I showed above is the WORKSHEET, which I generated in "TURBOTAX PRINT CENTER". It is just a print image of all my tax forms - so I cannot right click on any numbers there. The only other place I saw that $10 amount was after I finished answering the interview questions about the vehicle in the rental income section, and then did the FEDERAL REVIEW - which generated a warning message and showed the worksheet as part of the warning message. I could not left click on any number values there, but did not think to try right clicking. If I ever generate that warning again I will try right clicking to see if I can find the original source of where that $10 came from. All I know is that I did not directly enter that value.

 

The only other places I see that $10 amount is on FORM 4797, where it is somehow related to GROSS SALES PRICE of the vehicle, which I entered as $100. (I arrived at that number because the car was rear ended, and sold to a junk yard for $400. I read somewhere to use the percentage of use in my rental property as the business sales portion of the selling price, ans since I used the car no more than 25% of the time for my rental (likely only 10% of the time), so I  figured I would estimate high, to be safe, and used 25% of the $400 ($100) that I received from the junk yard - as the vehicles sales price. (I assume that is correct? Do you know?)

 

Anyways, FORM 4797 used that $100 in line 30 (GROSS SALES PRICE) and then TT put $10 on line 21, 22, 31 and then line 7 of FROM 4797, and determined that left me with a $90 GAIN on line 6 of FORM 4797. So that $10 appears to be some kind of calculated value to decrease the $100 GAIN to $90. But, i cannot see where that $10 amount comes from, or how it is calculated!

 

Below are the images of the FORM 4797 values:

 

Screenshot 2024-02-22 at 12-58-32 TaxReturn.pdf.pngScreenshot 2024-02-22 at 12-59-07 TaxReturn.pdf.png

 

 

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To answer your other question the amount on Line 37 as Prior Depreciation, is $1393. I arrived at $1393 by adding up the depreciation mileage portion of the standard mileage rate, for every year from 2015 to 2023. I'll paste the SCHEUDLE E WORKSHEET image below also

 

Screenshot 2024-02-22 at 12-34-13 TaxReturn.pdf.png

PatriciaV
Employee Tax Expert

How did TurboTax arrive at DEPRECIATION ALLOWED AMOUNT, on SCHEDULE E WORKSHEET, (Part VII), Line 51, of $10.00 ??

You might review your entries for this transaction to be sure you entered $100 for the sales price and not just $10. Since that figure appears on Form 4797 under Gross Sales Price, that suggests the value came from your sale entries.

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How did TurboTax arrive at DEPRECIATION ALLOWED AMOUNT, on SCHEDULE E WORKSHEET, (Part VII), Line 51, of $10.00 ??

Line 20 of FORM 4797 shows $100 for SALES PRICE (see image I uploaded). Line 21 somehow has $10 for COST  OR OTHER BASIS, and Line 22 has $10 for DEPRECIATION ALLOWED. (So I did enter $100, not $10. TT somehow calculated that $10, but I can;t see where, or how? I was hoping you knew).

How did TurboTax arrive at DEPRECIATION ALLOWED AMOUNT, on SCHEDULE E WORKSHEET, (Part VII), Line 51, of $10.00 ??

BTW, Is their some way to speak to you (or someone else) on he phone about this vehicle sale that was used in my rental activities? Would I need to pay a higher amount (but something above what I pad for, which I think is TurboTax  PREMIUM edition).

 

[PII Image removed]

How did TurboTax arrive at DEPRECIATION ALLOWED AMOUNT, on SCHEDULE E WORKSHEET, (Part VII), Line 51, of $10.00 ??

If the vehicle/asset change in business percentage from year to year, you can't report the sale in the vehicle section.

 

You need to say it was converted to personal use, then report the sale in the "Sale of Business Property" section.  And you need to MANUALLY calculate the numbers.

How did TurboTax arrive at DEPRECIATION ALLOWED AMOUNT, on SCHEDULE E WORKSHEET, (Part VII), Line 51, of $10.00 ??

This is confusing. Can you tell me if my MANUAL calculations below are the correct formula?

(And then I can use Turbotax to generate the same result).

 

I bought the car in 2010 for $2500.

I sold it March 29, 2023 for $400. (junkyard sale).

I have $1600 in depreciation 2010 to 2023 (based on depreciation portion of standard mileage deduction).

I used the vehicle about 20% for my rental property (on average). So, 80% of usage is personal use.

 

Is my 'cost basis' 20% of $2500? (ie: $500 ?)

Is my 'sale price basis' 20% of 400? (ie: $100 ?)

Do I subtract my cost basis from (selling price + depreciation) to arrive at gain or loss? (500 - (100 + 1600) ) ?

Do I have a income gain, or loss, for tax reporting? (Is it  -$1200  loss, or gain?)

 

I think if i understand WHY I am doing all these calculations, it would help me understand the TT forms. Thanks!

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