SOLD VEHICLE USED FOR RENTAL

[mra311]

I sold my rental house in August of 2019 for a slight gain.  I used the Sale of Business Property section to report this sale. 

I sold a vehicle in March of 2019 that I used on the rental and took the standard mileage deduction each year.  I purchased the vehicle new in 2005 and used it for personal use until I started using it for the rental in 2012.  The mileage use for the rental vaired from year to year, which typically was about 10% of total miles driven for the year.  The vehicle was use for personal use the rest of the time.  I never took depreciation on the vehicle.  I sold the vehicle in March of 2019.  How do I report this to pay any recapture tax?  

Do I use the Sale of Business Property section? 

If so, for Date Acquired do I use date I bought the vehicle or date I started to use it for the  rental?

For the Cost of Property, do I put original cost or FMV at the time I started using it for rental? 

How do I determine Depreciation taken when only standard mileage deduction was taken? 

Also, if I put in number I think I should TT says the sale did not result in a gain and deletes the sale.  So, where do I report this? 

[ColeenD3]

Please see this answer from Amanda R.

The software has to ask these questions so that it can complete your forms accurately.  If you used the standard mileage rate method to deduct your vehicle expenses, you can answer $0 to questions about recapture

[mra311]

I just put zeros in the boxes and that's it?  Is there no tax recapture when I take the standard mileage deduction? 

[ColeenD3]

No, there is no recapture for the vehicle. You used it very little for business and took standard miles.

As far as the rental property goes, if you rented it at all or tried to rent it in 2019, you should use the rental section to show the sale. If it was not rented in 2019, then stay with the Sales of Business Property section.

[okrandy]

I am not the original author but have similar questions.  

1. It is asking for prior depreciation equivalent (and AMT depreciation equivalent). I used the standard mileage deduction each year.  So, do I enter zero in the questions asking about depreciation?

2. I sold the vehicle used about 10% of the time for rental work. I traded it in on a new truck.  The trade in was $1,500. I have 4 rental properties.  For each property it asks me about selling the truck. Therefore, for each property it calculates a $1,500 gain for a $6,000 total.  What do need to differently to get TTax to accurately the $1,500 gain?

thanks.

[cmg1]

I have the same problem. A personal vehicle bought in 2004 started using for 3 rental properties in 2012 and sold them in 2019. Every year I have three auto forms and it is calculating three identical profits on the return to personal use of the car. I divided everything by three. The total miles, FMV and sale price that I put as $0. It seems to work but don't know if $0 is a legal sale price. I also found where you have to manually calculate all of your previous miles by around $0.25 to figure previous depreciation as TTAX never calculated it in previous years. I wish we could just enter the miles at standard rate and be done with it.

[teach12]

I have the same questions.  Is someone going to answer this from TT?  I need an answer to this exact question!!!

[Carl]

I never took depreciation on the vehicle.

Yes you did. With the per-mile deduction, depreciation is included.

for Date Acquired do I use date I bought the vehicle or date I started to use it for the rental?

The day you purchased the vehicle. Doesn't matter if it was years or even decades before you started using it in the business.

For the Cost of Property, do I put original cost or FMV at the time I started using it for rental?

You enter what you actually paid for the vehicle. I can guarantee you the FMV at the time you started using it in the rental business was not higher than what you paid for you.

How do I determine Depreciation taken when only standard mileage deduction was taken?

See the chart at https://www.smbiz.com/sbrl003.html#dsm  Since you were required to keep records of your mileage, it shouldn't be a problem.

Now in the end when all is said and done, you're going to find that you sold this vehicle at a loss. Even after the depreciation recapture.  But since it was 10% or less business use (according to you) you're going to find that the business portion of the loss you're allowed to claim on the SCH C will be so minimal, it will have no impact on your overall tax liability. It won't help, and it won't hurt.

So in the end, entering zero for the depreciation recapture will not change the outcome of your overall tax liability. Now if this vehicle was more than 50% business use, that "might" have a completely different outcome.

[AmeliesUncle]

If the business percentage varies over the years, TurboTax is NOT set up for that.   You will need to MANUALLY calculation everything and report it in the "Sale of Business Property" section and NOT in the vehicle section (say you converted the vehicle to personal use).

If it was personal use before you converted it to business use, that is ANOTHER  layer of complexity that TurboTax does NOT support.  I recommend going to a tax professional.