topic Sold a car in 2019 used for business since 2004. We must include "prior depreciation equivalent." We no longer have the mileage records for many of those years. HELP! in Business & farm

Sold a car in 2019 used for business since 2004. We must include "prior depreciation equivalent." We no longer have the mileage records for many of those years. HELP!

melreever — Mon, 05 Oct 2020 15:08:20 GMT

Re: Sold a car in 2019 used for business since 2004. We must include "prior depreciation equivalent." We no longer have the mileage records for many of those years. HELP!

Critter-3 — Mon, 05 Oct 2020 15:25:16 GMT

Look at the 2018 auto expenses worksheet for the cumulative amount.

Re: Sold a car in 2019 used for business since 2004. We must include "prior depreciation equivalent." We no longer have the mileage records for many of those years. HELP!

AmeliesUncle — Mon, 05 Oct 2020 21:32:53 GMT

@Critter-3 wrote:
Look at the 2018 auto expenses worksheet for the cumulative amount.

As far as I know, the program does not keep track of the cumulative business miles.

As for the original question, you either need to figure it out or come up with some good estimates.

If this vehicle was used for both business and personal use, TurboTax does not calculate that either and you can't enter the sale in the vehicle section. You need to either manually calculate and enter things, or go to a tax professional. But you still need to figure out (or estimate) the total cumulative business miles and the total cumulative total miles.

Re: Sold a car in 2019 used for business since 2004. We must include "prior depreciation equivalent." We no longer have the mileage records for many of those years. HELP!

Carl — Mon, 05 Oct 2020 23:11:49 GMT

If this helps, see https://bradfordtaxinstitute.com/Free_Resources/IRS-Mileage-Rates.xml.aspx and scroll down a little more than halfway to see the depreciation per mile rates for each year back to 2003. If you have tax returns back that far, then you whould have worksheets for each year that will break down business miles and personal miles. That's assuming you used Turbotax and took the per mile deduction each year.

Re: Sold a car in 2019 used for business since 2004. We must include "prior depreciation equivalent." We no longer have the mileage records for many of those years. HELP!

Opus 17 — Tue, 06 Oct 2020 00:48:59 GMT

It’s important to note that if you were audited, the IRS does not have to give you any deduction or adjustment that you can’t prove. If the car has been used for business, and if you don’t have records to show the amount of depreciation you claimed, the IRS could very easily decide that it has been fully depreciated and whatever you made on the sale should be treated as taxable depreciation recapture.

At an average new car price in 2004 of about $22,000, and an average of $.20 per mile for depreciation built into the standard mileage rate since then, you would only have to have driven the car 7500 miles per year on average for business in order to have fully depreciated it.

Re: Sold a car in 2019 used for business since 2004. We must include "prior depreciation equivalent." We no longer have the mileage records for many of those years. HELP!

AmeliesUncle — Tue, 06 Oct 2020 02:24:17 GMT

@Opus 17 wrote:
the IRS could very easily decide that it has been fully depreciated and whatever you made on the sale should be treated as taxable depreciation recapture.

At an average new car price in 2004 of about $22,000, and an average of $.20 per mile for depreciation built into the standard mileage rate since then, you would only have to have driven the car 7500 miles per year on average for business in order to have fully depreciated it.

But if there was personal use, that is not how it works. For example, if the vehicle's average use was exactly 50%, then the Business Basis would be $11,000. And if the business portion was fully depreciated, only 50% of the sale would be taxable depreciation recapture (the gain on the business portion of the vehicle).