topic Is my auto considered "converted to nonbusiness use" if I actually closed my business? in Business & farm

Is my auto considered "converted to nonbusiness use" if I actually closed my business?

greensweep — Sat, 01 Jun 2019 01:38:57 GMT

I'm not sure about the line of questioning about recapture when vehicles are converted to personal use. I mean, yes, it's 100% personal use now because I no longer have my business and work for an employer. Or does the question just apply if you still have a business and no longer use that vehicle for it?

The question applies either way. If you sold, closed, or...

Carl — Sat, 01 Jun 2019 01:38:59 GMT

The question applies either way. If you sold, closed, or disposed of the business, then you have to show your disposition of any vehicle used in that business. Since you closed your business and kept the vehicle, the disposition of the vehicle is "removed for personal use".
As far as the IRS is concerned, your business is not closed, sold or disposed of until you have reported the disposition of all assets in the business, and that includes any and all vehicular business use.

Thank you. It's saying I have to fill in the "recapture"...

greensweep — Sat, 01 Jun 2019 01:39:00 GMT

Thank you. It's saying I have to fill in the "recapture" section, but this is what confuses me. I never used the vehicle more than 50% for business, and never claimed depreciation for it. I only ever used the standard mileage deduction for its use, but TT is directing me to report recapture under the "Sale of business property" section.

You're asked for recapture info only if you did anything...

Carl — Sat, 01 Jun 2019 01:39:01 GMT

You're asked for recapture info only if you did anything other than "removed for personal use". You need to work back through the vehicle section again from the start. Indicate you stopped using it in 2016, and then on the "Special Handling Required?" screen, click YES. If you click NO, then you have to put in sales information and recapture the deprecation.
The depreciation differs year to year, just like the mileage deduction does. That mileage deduction includes depreciation, so that's why it changes year to year. Even if you did sell the vehicle, I seriously doubt you sold it at a gain....even after you recapture the depreciation. So instead of doing all that math, it's easiest to just declare it removed for personal use.
As a side note, in my personal opinion, the loss you could claim on the sale of a business vehicle, is just not worth all the manual math you have to go through.