Is the FMV of my vehicle when placed in service, the Fair Market Value on the date starting use for business purposes or the FMV on the date it was originally purchased?

[KittyM · Accepted solution]

It would be the Fair Market Value on the date you started using it for business.  "Placed in service" is the tax code's fancy way of saying that.

[ieinidless]

How would you find out what the fair market value of the car was at the time it was placed in service?
I have a vehicle that was placed in service 3 years ago but I didn't get the fair market value of it at the time and now I sold the vehicle and I need to know what the fair market value was. Thank You

[asparrow08]

Did you ever figure out a way to determine FMV from years prior?

[MQubed]

I have the same question:  How do I calculate the Fair Market Value of a 1991 Ford Explorer when placed in service in 2003 (and sold in 2021)??

Is there a simple statement of "take these values," do math and get an "old" FMV?

[DianeW777]

No fair market value (FMV) is needed. When you sell a vehicle, you use the actual cost less to calculate the gain or loss.  It is adjusted by the depreciation deduction that was used on your tax return for a business activity. 

The FMV is required to be used for depreciation purposes if you use actual expenses on the vehicle when it is placed in service the first year ONLY if that FMV is less than the actual cost of the vehicle at that time.

If you used the standard mileage rate for any or all years the vehicle was used in business, then you must calculate the depreciation that was used by a portion of the standard mileage rate that represents depreciation.  This number is multiplied by the business miles for each year of service.  If you know that the full cost of the vehicle was expensed because it's been on your tax return all these years at 100% business use, then the depreciation for the life of the vehicle will likely be the cost of the vehicle. This wouldn't take much calculation to figure out.

Once you have the figures you need to calculate gain, you can use the method below to enter your sale.

1. Sign into your TurboTax account:
   • Under Business Income and Expenses >Less Common Business Situations > Sale of Business Property Start or Revisit > Enter your sale (TurboTax CD/Download)
   • Under Wages and Income > Other Business Situations > Sale of Business Property (TurboTax Online)
2. See images below (TurboTax CD/Download will look similar

[MQubed]

@DianeW777 thank you!

What if the car wasn't used 100% in the business?

[DianeW777]

Using the information provided earlier in this thread will allow you to determine the business use percentage and then enter your sale as directed with only the business use percentage of cost basis, selling price which will result in the business use percentage of gain/loss.

@MQubed