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sale of vehicle used 10% for rental properties

If I purchase a vehicle for $34k and sell it for $15k and used it 10% for rental properties.  I took at most $2k in mileage deductions over 4 years.  How do I enter this?  It keeps saying I have a gain.  If I lost $1.9k (10% of loss) and part of the $2k was reimbursement for spending on things like gas, oil changes and other consumable items that I spent money on in addition to the $34k, why do I have a gain?  Do I need to add gas and maintenance to the purchase price.  Do I ever answer the questions with a negative number?  I didn't depreciate the vehicle and it asks for a depreciation type and year.  The questions are never ending and it seems like the mileage rate was just offsetting actual costs.  Is it better to do actual costs instead of the mileage rate for a vehicle used 10% for business?   It feels like it is making it more complicated than necessary.

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1 Reply
DianeW777
Expert Alumni

sale of vehicle used 10% for rental properties

Entering the sale is shown below, including how to arrive at the depreciation when you use the standard mileage rate for a business vehicle. There will be no reason to enter any negative numbers for your vehicle sale. Do not add any expenses used for gas, oil, etc. 

 

The way to report the sale (trade is not really recognized by the IRS any longer for equipment or vehicles) is as follows. You have all the records so it should provide you the detail to move forward.

  1. All business miles for all years and then total miles for all years - divide business miles by total miles to arrive at your overall business use percentage for the life of the vehicle. You will use this percentage times the selling price (or trade-in value) to arrive at the business selling price. Use the same percentage to arrive at your business portion of the cost before depreciation. 
  2. You used the standard mileage rate and a portion of that rate represents depreciation. See the chart below to arrive at the depreciation portion for the business miles only.
  3. When you go through the vehicle information in your rental be sure to select 'Sold, disposed of, etc....' then do not indicate it was sold.  You must say 'Yes' it was converted to personal use.  This will eliminate any sales information in the vehicle it self.
  4. Once you have completed the information in that section you will follow the steps below to enter your sale:
    1. Go to Less Common Business Situations
    2. Scroll to Sale of  Business Property
    3. On the next screen select Any Other Property Sale
    4. Use the information from step one and the depreciation from step 2 to complete your sale
  5. If the personal portion of your vehicle is a loss there is nothing to report for that portion of the sale/trade. 

                               

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