topic Traded 100% business vehicle for personal vehicle in Business & farm

Traded 100% business vehicle for personal vehicle

bk2007 — Mon, 09 Mar 2026 05:52:19 GMT

I operate a business as a sole proprietor (schedule c) with 3 employees. I have three business vehicles (registered in busines name). I recently traded one of them for my own personal vehicle registered in my name.

I was allowed $17,000 for the trade in of the business vehicle towards my personal car. The business vehicle was purchased new in 2015 and was fully depreciated. As I completed the information and answered the questions in TurboTax, it would appear that the $17,000 is not taxable in any way. Is this correct?

Re: Traded 100% business vehicle for personal vehicle

AmeliesUncle — Thu, 17 Feb 2022 14:42:31 GMT

No, that is not correct. That would be a taxable transaction.

Was the sold vehicle always used 100% for business since you owned it?

Re: Traded 100% business vehicle for personal vehicle

bk2007 — Thu, 17 Feb 2022 15:03:53 GMT

Yes, 100% until traded in for personal vehicle.

Re: Traded 100% business vehicle for personal vehicle

AmeliesUncle — Thu, 17 Feb 2022 20:15:04 GMT

Then because it was fully depreciated, it should be showing a $17,000 taxable gain.

You may need to go back through the vehicle section to review things. Be sure to indicate that the vehicle was sold, and it should ask you the selling price.

Re: Traded 100% business vehicle for personal vehicle

bk2007 — Sun, 20 Feb 2022 13:08:13 GMT

I thought that but it says that if I converted it to personal use or traded it in it to leave it as $0.

Re: Traded 100% business vehicle for personal vehicle

ColeenD3 — Sun, 20 Feb 2022 14:13:44 GMT

In terms of leaving it at zero as mentioned above, conversion to personal use does not create a taxable event. However, if you sold the personal car at a later date, the basis would be zero. In addition, you did not trade in a business vehicle for another business vehicle as assumed by the program. You traded it in for a personal vehicle.

Re: Traded 100% business vehicle for personal vehicle

Rick19744 — Sun, 20 Feb 2022 14:24:31 GMT

I agree with @AmeliesUncle .

You have two transactions going on here.

First you "sold" a business asset that was fully depreciated and received $17,000. You just need to indicate in TT that the vehicle was sold. This will generate a $17,000 gain on the form 4797.
Second, you then used those proceeds to purchase another vehicle; a personal vehicle.
These two transactions are separate. There is no conversion of a business vehicle to personal vehicle. The business vehicle is gone.

Re: Traded 100% business vehicle for personal vehicle

Papavictor — Mon, 21 Feb 2022 12:46:14 GMT

What if the vehicle wasn't traded or sold but no longer able to of service? A total loss?

Re: Traded 100% business vehicle for personal vehicle

PatriciaV — Mon, 21 Feb 2022 13:15:42 GMT

@Papavictor
Yes, if you can no longer use the vehicle for business, the remaining value of the vehicle will be claimed as a loss.

To report this in TurboTax, edit the vehicle and check the box for "I stopped using this vehicle in 2021" on the page titled "Tell us about your business vehicle." Enter the date you stopped using it. Later in the interview, you will see the "Sales price" page. Click the link "how to determine the sales price" for more help. Enter zero or leave the sales price blank to claim it as a loss.

Re: Traded 100% business vehicle for personal vehicle

AmeliesUncle — Mon, 21 Feb 2022 16:40:44 GMT

@Papavictor wrote:
What if the vehicle wasn't traded or sold but no longer able to of service?

What exactly does that mean?

If it means the vehicle won't run and you can't find any buyers for it (not even a scrapyard), yes, that would be a total loss.

Otherwise, it probably won't be a loss until you actually "dispose" of the vehicle.

If you give details about exactly why the vehicle is "no longer able to be of service", we may be able to provide a clearer answer.

Re: Traded 100% business vehicle for personal vehicle

AmeliesUncle — Mon, 21 Feb 2022 16:42:30 GMT

@PatriciaV wrote:

Yes, if you can no longer use the vehicle for business, the remaining value of the vehicle will be claimed as a loss.

It may depend on the situation, but you usually can't claim a loss until the vehicle is actually disposed.

Re: Traded 100% business vehicle for personal vehicle

Green H — Wed, 13 Mar 2024 22:10:04 GMT

If I have a business, take actual vehicle expense deduction, business is closed after two year depreciation, Car was used for 80% + for business, now because business is closed, car is 100% personal use. How should I enter in TT

Also I have a business, take mileage deduction. business is closed after two year depreciation, Car was used for 80% + for business, now because business is closed, car is 100% personal use. How should I enter in TT

Thanks

Re: Traded 100% business vehicle for personal vehicle

RobertB4444 — Thu, 14 Mar 2024 00:59:45 GMT

For this year you just need to indicate that the vehicle has been converted to personal use and save a copy of all of the depreciation that you have taken on the vehicle to date.

When you sell the vehicle you will need to enter all of the depreciation information into TurboTax and pay tax on any of the depreciation that you recapture in that sale.

@Green H

Re: Traded 100% business vehicle for personal vehicle

AmeliesUncle — Thu, 14 Mar 2024 03:18:32 GMT

@Green H wrote:
If I have a business, take actual vehicle expense deduction, business is closed after two year depreciation, Car was used for 80% + for business, now because business is closed, car is 100% personal use. How should I enter in TT

How was that vehicle depreciated? Did you use any kind of accelerated depreciation, such as Bonus, Section 179 or 200%DB?

Re: Traded 100% business vehicle for personal vehicle

Green H — Fri, 15 Mar 2024 00:02:01 GMT

@AmeliesUncle I didn't use any Bonus, Section 179 or 200%DB

Re: Traded 100% business vehicle for personal vehicle

Green H — Fri, 15 Mar 2024 00:01:12 GMT

@RobertB4444 Thanks for you reply

I do understand what you said, however, after business is closed, I don't have any schedule C to file. Where should I enter the vehicle information if I sold or disposal in the future ? Thanks

Re: Traded 100% business vehicle for personal vehicle

ThomasM125 — Fri, 15 Mar 2024 01:53:40 GMT

Once the business is sold the vehicle becomes a personal asset. If you sell it at a loss then you don't report it on your tax return since you can't deduct a loss on a personal asset. If you sell it at a gain, you would report it as a sale of a business asset and the gain would be a capital gain except for the portion equal to depreciation, which would taxed as ordinary income.

If you report the sale at a gain, you would enter it the Less Common Business Situations section, which is in the business section of TurboTax:

You will see a screen where you can enter the cost, sales price and depreciation on the vehicle.

[Edited 3/14/24 @6:15 PM EST] @Green H

Re: Traded 100% business vehicle for personal vehicle

AmeliesUncle — Sat, 16 Mar 2024 19:46:18 GMT

@Green H wrote:
@AmeliesUncle I didn't use any Bonus, Section 179 or 200%DB

Then as the other answers indicate, nothing needs to be done until it is sold or otherwise disposed.

If you had used any (or all) of those three things, then the answer would be different.

Re: Traded 100% business vehicle for personal vehicle

Green H — Sun, 17 Mar 2024 02:16:32 GMT

@ThomasM125

So even I don't have business, I still need file that on the business section on TT when I sell the car if there is a grain?

Re: Traded 100% business vehicle for personal vehicle

Green H — Sun, 17 Mar 2024 02:20:06 GMT

@AmeliesUncle If I had bones depreciation or section 179, How should I do that? is that same way, calculate how much depreciation I took total in the business years, basie cost - those deprecation. If I sold car more that that number, I need to report, if I sold the car less than that number, I don't need report anything ?