topic I traded in a business vehicle for another business vehicle on 1/1/2018. how would I calculate the gain/loss basis and previous years depreciation? in Deductions & credits https://ttlc.intuit.com/community/tax-credits-deductions/discussion/i-traded-in-a-business-vehicle-for-another-business-vehicle-on-1-1-2018-how-would-i-calculate-the/01/552375#M71467 Wed, 05 Jun 2019 05:31:25 GMT crazyvees 2019-06-05T05:31:25Z I traded in a business vehicle for another business vehicle on 1/1/2018. how would I calculate the gain/loss basis and previous years depreciation? https://ttlc.intuit.com/community/tax-credits-deductions/discussion/i-traded-in-a-business-vehicle-for-another-business-vehicle-on-1-1-2018-how-would-i-calculate-the/01/552375#M71467 Wed, 05 Jun 2019 05:31:25 GMT https://ttlc.intuit.com/community/tax-credits-deductions/discussion/i-traded-in-a-business-vehicle-for-another-business-vehicle-on-1-1-2018-how-would-i-calculate-the/01/552375#M71467 crazyvees 2019-06-05T05:31:25Z If you have been claiming expenses for your Business Vehi... https://ttlc.intuit.com/community/tax-credits-deductions/discussion/if-you-have-been-claiming-expenses-for-your-business-vehi/01/552380#M71469 <P>If you have been claiming expenses for your Business Vehicle, go to your <B><I>Self Employment Expenses.&nbsp;&nbsp;</I></B><I></I>Type '<B><I>schedule c' </I></B>in the Search window, and '<B><I>Jump to schedule c'</I></B> to get there.&nbsp;</P><P>Edit your Vehicle, and indicate you '<B><I>stopped using it for business' </I></B>on 1/1/18 (screenshot).&nbsp; TurboTax will ask questions about ownership, other vehicles, business mileage in 2018, etc.</P><P>Since you traded in the vehicle, you could enter $0 as a sales price, and subtract the amount of trade-in you received from the new vehicle's basis when you enter it as a Business Asset.&nbsp;&nbsp;</P><P>Or, you could report the <B><I>Sales Price</I></B> as the trade-in amount, and set up the new vehicle with a cost basis of what you paid for it.&nbsp;</P><P>When entering these amounts use the % of Business Use as your entries.</P><P>If you have been claiming <B><I>Standard Mileage </I></B>for your business mileage,<B><I> depreciation is included in the deduction</I></B>.&nbsp;</P><P>Here's how to calculate the Standard Mileage <B><I>Depreciation Equivalent </I></B>(use the same amount for 'Basis for gain/loss' and 'Basis for AMT gain/loss'):</P><P> <I>"Depreciation equivalent for total miles is a small portion of depreciation that is included (by default) when using standard mileage rate for your business car.&nbsp; When you take standard mileage rate while deducting your business car miles, you must account for 'depreciation equivalent' when disposing of that car.&nbsp;</I> </P><DIV> <P><I>The IRS provides a&nbsp;</I><A rel="nofollow" href="https://www.irs.gov/pub/irs-pdf/p463.pdf" target="_blank"><I>table with the depreciation equivalent rate</I></A><I>&nbsp;for each year (page 24 of the link, IRS publication 463)</I></P> <P><B><I>2012 and 2013</I></B><I>: rate is $0.23/mile</I></P> <P><B><I>2014</I></B><I>: rate is $0.22/mile</I></P> <P><B><I>2015 and 2016</I></B><I>: rate is $0.24/mile</I></P> <P><I>&nbsp;</I><B><I>Example:</I></B><I>&nbsp;You drove 1000 miles as business miles in 2014, 2015 and 2016 and took standard mileage deduction for each year. To calculate your depreciation equivalent - when disposing your car -&nbsp;you must know how many business miles you drove and the depreciation equivalent rate from the IRS (which I listed above). The calculation is as follows:</I></P> <P><I>2014: 1000 miles times $0.22 rate = $220</I></P> <P><I>2015 and 2016: 2000 miles times $0.24 rate =$480</I></P> <P></P> <P><I>Your total depreciation equivalent (also called total prior depreciation) is $700 (the same amount applies to AMT).</I><B><I>&nbsp;Note:</I></B><I>&nbsp;When depreciation equivalent is added, it changes your cost basis for the car.&nbsp;</I></P> </DIV><DIV> <I>Answered by&nbsp;</I><I><A href="https://ttlc.intuit.com/users/64920340" target="_blank">TurboTaxMargaretL</A>"</I> </DIV> Wed, 05 Jun 2019 05:31:27 GMT https://ttlc.intuit.com/community/tax-credits-deductions/discussion/if-you-have-been-claiming-expenses-for-your-business-vehi/01/552380#M71469 MarilynG 2019-06-05T05:31:27Z if I take standard mileage why would I enter the new vehi... https://ttlc.intuit.com/community/tax-credits-deductions/discussion/if-i-take-standard-mileage-why-would-i-enter-the-new-vehi/01/552386#M71472 if I take standard mileage why would I enter the new vehicle as an asset?<BR /> Wed, 05 Jun 2019 05:31:29 GMT https://ttlc.intuit.com/community/tax-credits-deductions/discussion/if-i-take-standard-mileage-why-would-i-enter-the-new-vehi/01/552386#M71472 jessiedee23 2019-06-05T05:31:29Z Re: if I take standard mileage why would I enter the new vehi... https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-if-i-take-standard-mileage-why-would-i-enter-the-new-vehi/01/869742#M107480 <P>If you wanted to start using actual expenses.&nbsp;&nbsp;</P> Sat, 19 Oct 2019 15:31:46 GMT https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-if-i-take-standard-mileage-why-would-i-enter-the-new-vehi/01/869742#M107480 hbval 2019-10-19T15:31:46Z Re: If you have been claiming expenses for your Business Vehi... https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-if-you-have-been-claiming-expenses-for-your-business-vehi/01/1909473#M180382 <P>I have a bit of a unique problem and I am trying to solve it.&nbsp; I have talked to three Turbo Tax experts online, and none of them could help solve my problem.&nbsp; I sold my old car on 8/24.&nbsp; I am an independent contractor who uses a personal vehicle less than 50% of the time for business.&nbsp; I have always taken the standard deduction for mileage and I have never used form 179 to depreciate the vehicle in any year.&nbsp; As I am itemizing my expenses for schedule C, for my vehicle expenses, I am being asked to detail the information about the car I am taking out of service.&nbsp; The dealership offered me $500 for my old car.&nbsp; I used it 24.71% in 2020, meaning $124 applied as a business gain, which I entered.&nbsp; Then, I get taken to a screen that asks me about "vehicle Cost".&nbsp; I am assuming this was the original cost of the vehicle, when I bought it in 2008, so I entered that cost of $35000.&nbsp; I then got a screen to determine basis of loss/gain.&nbsp; I originally bought this car for $35000, and traded in a car that was worth $23000 (new in 2003), so I list my gain as $12000.&nbsp; The next screen asks me for my prior depreciation equivalent, which is $31116.&nbsp; The next screen tells me that my Gain on Sale is $124.&nbsp; When I go to my main page of income and expenses, it lists the "Sale of Business Property" as $5808.&nbsp; Nobody can tell me why that number is popping as income, and nobody can tell me what I am entering wrong.&nbsp; Can you help?</P> Fri, 12 Feb 2021 04:47:17 GMT https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-if-you-have-been-claiming-expenses-for-your-business-vehi/01/1909473#M180382 daveboyer 2021-02-12T04:47:17Z Re: If you have been claiming expenses for your Business Vehi... https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-if-you-have-been-claiming-expenses-for-your-business-vehi/01/1934832#M182743 <P><LI-USER uid="3203415" login="daveboyer"></LI-USER> Your '<EM>Cost of your Business Vehicle</EM>' is the <EM>FMV when you started using it for Business</EM>.&nbsp;</P> <P>&nbsp;</P> <P>You don't need to enter the value of the vehicle you traded in for this vehicle,<EM> unless it was also used for Business</EM>, and you were claiming Standard Mileage for it.&nbsp;</P> <P>&nbsp;</P> <P><EM>If this this the case, then your 'new' Business Vehicle would have a Cost Basis of $12,000, </EM>which was fully depreciated with your Depreciation Equivalent of $31,000.&nbsp; Make sure this Depreciation Equivalent is correct.&nbsp; It sounds too high if you only used your Business Vehicle 24% of the time.&nbsp; <U>You can only enter an amount of Depreciation not greater than the Cost Basis</U>, <EM>which indicates that the vehicle was fully depreciated.</EM></P> <P>&nbsp;</P> <P>This then reports it as a '<EM>Sale of Business Property</EM>'.&nbsp; TurboTax will do this automatically for you. You can <A href="https://ttlc.intuit.com/community/accessing/help/how-do-i-edit-or-delete-sale-of-business-property-form-4797/01/26789" target="_blank">Delete the Sale of Business Property</A> in your return and go back to your Business and re-enter the Sale/Disposition info.</P> <P>&nbsp;</P> <P>You should have a<EM> Sales of Business Property</EM> gain of $500, which is what you received for your fully-depreciated Business Vehicle.&nbsp;</P> <P>&nbsp;</P> <P>Click this link for more info on <A href="https://ttlc.intuit.com/community/business-taxes/discussion/capital-gain-from-sale-of-auto-used-for-business-and-personal/00/168274#M5335" target="_blank">Sale/Disposition of Business Vehicle.&nbsp;</A></P> <P>&nbsp;</P> <P>&nbsp;</P> <P>&nbsp;</P> <P>&nbsp;</P> <P>&nbsp;</P> Tue, 16 Feb 2021 19:11:44 GMT https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-if-you-have-been-claiming-expenses-for-your-business-vehi/01/1934832#M182743 MarilynG1 2021-02-16T19:11:44Z
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topic I traded in a business vehicle for another business vehicle on 1/1/2018. how would I calculate the gain/loss basis and previous years depreciation? in Deductions & credits
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https://ttlc.intuit.com/community/tax-credits-deductions/discussion/i-traded-in-a-business-vehicle-for-another-business-vehicle-on-1-1-2018-how-would-i-calculate-the/01/552375#M71467
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I traded in a business vehicle for another business vehicle on 1/1/2018. how would I calculate the gain/loss basis and previous years depreciation?
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https://ttlc.intuit.com/community/tax-credits-deductions/discussion/i-traded-in-a-business-vehicle-for-another-business-vehicle-on-1-1-2018-how-would-i-calculate-the/01/552375#M71467
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If you have been claiming expenses for your Business Vehi...
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https://ttlc.intuit.com/community/tax-credits-deductions/discussion/if-you-have-been-claiming-expenses-for-your-business-vehi/01/552380#M71469
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<P>If you have been claiming expenses for your Business Vehicle, go to your <B><I>Self Employment Expenses.&nbsp;&nbsp;</I></B><I></I>Type '<B><I>schedule c' </I></B>in the Search window, and '<B><I>Jump to schedule c'</I></B> to get there.&nbsp;</P><P>Edit your Vehicle, and indicate you '<B><I>stopped using it for business' </I></B>on 1/1/18 (screenshot).&nbsp; TurboTax will ask questions about ownership, other vehicles, business mileage in 2018, etc.</P><P>Since you traded in the vehicle, you could enter $0 as a sales price, and subtract the amount of trade-in you received from the new vehicle's basis when you enter it as a Business Asset.&nbsp;&nbsp;</P><P>Or, you could report the <B><I>Sales Price</I></B> as the trade-in amount, and set up the new vehicle with a cost basis of what you paid for it.&nbsp;</P><P>When entering these amounts use the % of Business Use as your entries.</P><P>If you have been claiming <B><I>Standard Mileage </I></B>for your business mileage,<B><I> depreciation is included in the deduction</I></B>.&nbsp;</P><P>Here's how to calculate the Standard Mileage <B><I>Depreciation Equivalent </I></B>(use the same amount for 'Basis for gain/loss' and 'Basis for AMT gain/loss'):</P><P> <I>"Depreciation equivalent for total miles is a small portion of depreciation that is included (by default) when using standard mileage rate for your business car.&nbsp; When you take standard mileage rate while deducting your business car miles, you must account for 'depreciation equivalent' when disposing of that car.&nbsp;</I> </P><DIV> <P><I>The IRS provides a&nbsp;</I><A rel="nofollow" href="https://www.irs.gov/pub/irs-pdf/p463.pdf" target="_blank"><I>table with the depreciation equivalent rate</I></A><I>&nbsp;for each year (page 24 of the link, IRS publication 463)</I></P> <P><B><I>2012 and 2013</I></B><I>: rate is $0.23/mile</I></P> <P><B><I>2014</I></B><I>: rate is $0.22/mile</I></P> <P><B><I>2015 and 2016</I></B><I>: rate is $0.24/mile</I></P> <P><I>&nbsp;</I><B><I>Example:</I></B><I>&nbsp;You drove 1000 miles as business miles in 2014, 2015 and 2016 and took standard mileage deduction for each year. To calculate your depreciation equivalent - when disposing your car -&nbsp;you must know how many business miles you drove and the depreciation equivalent rate from the IRS (which I listed above). The calculation is as follows:</I></P> <P><I>2014: 1000 miles times $0.22 rate = $220</I></P> <P><I>2015 and 2016: 2000 miles times $0.24 rate =$480</I></P> <P></P> <P><I>Your total depreciation equivalent (also called total prior depreciation) is $700 (the same amount applies to AMT).</I><B><I>&nbsp;Note:</I></B><I>&nbsp;When depreciation equivalent is added, it changes your cost basis for the car.&nbsp;</I></P> </DIV><DIV> <I>Answered by&nbsp;</I><I><A href="https://ttlc.intuit.com/users/64920340" target="_blank">TurboTaxMargaretL</A>"</I> </DIV>
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<pubDate>Wed, 05 Jun 2019 05:31:27 GMT</pubDate>
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<dc:date>2019-06-05T05:31:27Z</dc:date>
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if I take standard mileage why would I enter the new vehi...
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https://ttlc.intuit.com/community/tax-credits-deductions/discussion/if-i-take-standard-mileage-why-would-i-enter-the-new-vehi/01/552386#M71472
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if I take standard mileage why would I enter the new vehicle as an asset?<BR />
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<pubDate>Wed, 05 Jun 2019 05:31:29 GMT</pubDate>
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<dc:date>2019-06-05T05:31:29Z</dc:date>
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Re: if I take standard mileage why would I enter the new vehi...
</title>
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https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-if-i-take-standard-mileage-why-would-i-enter-the-new-vehi/01/869742#M107480
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<P>If you wanted to start using actual expenses.&nbsp;&nbsp;</P>
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<pubDate>Sat, 19 Oct 2019 15:31:46 GMT</pubDate>
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<dc:creator>hbval</dc:creator>
<dc:date>2019-10-19T15:31:46Z</dc:date>
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Re: If you have been claiming expenses for your Business Vehi...
</title>
<link>
https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-if-you-have-been-claiming-expenses-for-your-business-vehi/01/1909473#M180382
</link>
<description>
<P>I have a bit of a unique problem and I am trying to solve it.&nbsp; I have talked to three Turbo Tax experts online, and none of them could help solve my problem.&nbsp; I sold my old car on 8/24.&nbsp; I am an independent contractor who uses a personal vehicle less than 50% of the time for business.&nbsp; I have always taken the standard deduction for mileage and I have never used form 179 to depreciate the vehicle in any year.&nbsp; As I am itemizing my expenses for schedule C, for my vehicle expenses, I am being asked to detail the information about the car I am taking out of service.&nbsp; The dealership offered me $500 for my old car.&nbsp; I used it 24.71% in 2020, meaning $124 applied as a business gain, which I entered.&nbsp; Then, I get taken to a screen that asks me about "vehicle Cost".&nbsp; I am assuming this was the original cost of the vehicle, when I bought it in 2008, so I entered that cost of $35000.&nbsp; I then got a screen to determine basis of loss/gain.&nbsp; I originally bought this car for $35000, and traded in a car that was worth $23000 (new in 2003), so I list my gain as $12000.&nbsp; The next screen asks me for my prior depreciation equivalent, which is $31116.&nbsp; The next screen tells me that my Gain on Sale is $124.&nbsp; When I go to my main page of income and expenses, it lists the "Sale of Business Property" as $5808.&nbsp; Nobody can tell me why that number is popping as income, and nobody can tell me what I am entering wrong.&nbsp; Can you help?</P>
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<pubDate>Fri, 12 Feb 2021 04:47:17 GMT</pubDate>
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<dc:creator>daveboyer</dc:creator>
<dc:date>2021-02-12T04:47:17Z</dc:date>
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Re: If you have been claiming expenses for your Business Vehi...
</title>
<link>
https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-if-you-have-been-claiming-expenses-for-your-business-vehi/01/1934832#M182743
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<P><LI-USER uid="3203415" login="daveboyer"></LI-USER> Your '<EM>Cost of your Business Vehicle</EM>' is the <EM>FMV when you started using it for Business</EM>.&nbsp;</P> <P>&nbsp;</P> <P>You don't need to enter the value of the vehicle you traded in for this vehicle,<EM> unless it was also used for Business</EM>, and you were claiming Standard Mileage for it.&nbsp;</P> <P>&nbsp;</P> <P><EM>If this this the case, then your 'new' Business Vehicle would have a Cost Basis of $12,000, </EM>which was fully depreciated with your Depreciation Equivalent of $31,000.&nbsp; Make sure this Depreciation Equivalent is correct.&nbsp; It sounds too high if you only used your Business Vehicle 24% of the time.&nbsp; <U>You can only enter an amount of Depreciation not greater than the Cost Basis</U>, <EM>which indicates that the vehicle was fully depreciated.</EM></P> <P>&nbsp;</P> <P>This then reports it as a '<EM>Sale of Business Property</EM>'.&nbsp; TurboTax will do this automatically for you. You can <A href="https://ttlc.intuit.com/community/accessing/help/how-do-i-edit-or-delete-sale-of-business-property-form-4797/01/26789" target="_blank">Delete the Sale of Business Property</A> in your return and go back to your Business and re-enter the Sale/Disposition info.</P> <P>&nbsp;</P> <P>You should have a<EM> Sales of Business Property</EM> gain of $500, which is what you received for your fully-depreciated Business Vehicle.&nbsp;</P> <P>&nbsp;</P> <P>Click this link for more info on <A href="https://ttlc.intuit.com/community/business-taxes/discussion/capital-gain-from-sale-of-auto-used-for-business-and-personal/00/168274#M5335" target="_blank">Sale/Disposition of Business Vehicle.&nbsp;</A></P> <P>&nbsp;</P> <P>&nbsp;</P> <P>&nbsp;</P> <P>&nbsp;</P> <P>&nbsp;</P>
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<pubDate>Tue, 16 Feb 2021 19:11:44 GMT</pubDate>
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<dc:creator>MarilynG1</dc:creator>
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