topic basis for gains /loss and depreciation equivalent in Self employed

basis for gains /loss and depreciation equivalent

lori9753 — Mon, 09 Mar 2026 09:04:46 GMT

Have a17 year old pick up truck with 200k miles on it. It was totaled this year. Bought new for 20k in 2004 but got nothing when disposed of. What should i be entering for gains /loss and prior year depreciation. Always used standard mileage every year.

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Re: basis for gains /loss and depreciation equivalent

ColeenD3 — Sat, 05 Mar 2022 13:20:57 GMT

Your purchase contrasted to your zero sales price will give you a loss. However, even with standard miles, you have to calculate depreciation.

Yes, when you are selling or trading in a business vehicle, you must adjust your adjusted basis for depreciation allowed or allowable and if you used the standard mileage rate, you must adjust the basis for the allocation depreciation amount per mile for all business mileage deducted.

Depreciation component of standard mileage rate.

For computing the taxpayer’s basis in an automobile, the standard mileage rate has a component that represents depreciation.

For 2021, the depreciation component is 26¢ per mile.

If the actual expense method is used in any year after the standard mileage rate method has been used, the straight-line method of depreciation must be used. (Rev. Proc. 2004-64)

Depreciation Component of the Standard Mileage RateYear.....................2020..........2019..........2018..........2017..........2016

Rate per mile................27¢............26¢...........25¢............25¢............24¢

Note: These rates do not apply for any year in which the actual expenses method was used

X For additional information refer to the following link:

depreciation component of standard mileage rate

Re: basis for gains /loss and depreciation equivalent

LudwigVan_fan — Sat, 05 Mar 2022 20:31:08 GMT

I would be quite careful in your calculations. A 17 year-old pickup (by your statement, I'm assuming you had it the entire time?) would be depreciated out and the basis would be zero.

Using the standard mileage rate implies that it was part business and part personal. If that is the case, any calculation would need to compare the business portion of the cost of the pickup, and the personal portion. The depreciation portion of the standard mileage rate would be deducted from the business portion of the cost of the pickup to arrive at the basis at the time of loss.

SECTION 4. BASIS REDUCTION AMOUNT
For automobiles a taxpayer uses for business purposes, the portion of the
business standard mileage rate treated as depreciation is 24 cents per mile for 2016, 25
cents per mile for 2017, 25 cents per mile for 2018, 26 cents per mile for 2019, and 27
cents per mile for 2020. See section 4.04 of Rev. Proc. 2019-46.

If that is zero or below cost, there is no business loss. Any loss would then be personal.