topic How to enter a loss on a business vehicle due to impound? in Get your taxes done using TurboTax

How to enter a loss on a business vehicle due to impound?

craftdad — Wed, 01 Apr 2020 03:30:25 GMT

I am partially self-employed and use my personal vehicle for business purposes. My business vehicle was towed and impounded last fall, and the impound lot auctioned it and recovered a couple hundred dollars. I ended up still owing $1200 in fees to the city and impound lot. How do I record this loss in TurboTax?

Re: How to enter a loss on a business vehicle due to impound?

craftdad — Wed, 01 Apr 2020 03:34:08 GMT

For now, I've entered the "Sale Price" as $220 and the "Expense of Sale" section as $1200 (x.1 for both, since I used the vehicle about 1/10 for self-employment and 9/10 commuting for my and my partner's other W2 employment)

Re: How to enter a loss on a business vehicle due to impound?

KurtL1 — Wed, 01 Apr 2020 19:46:24 GMT

You cannot deduct the $1,200 on your return. Local fines and penalties are deductible only to the extent they don't arise from a violation of any law. Your car was towed because it violated local law statutes. You cannot claim the impound fee as an expense of sale.

Because you only used the vehicle 1/10 of the time for business, only 1/10 of the sale income should be used to calculate the gain (loss) on the sale of the vehicle.