In 2018 I traded in a business vehicle and incurred a LOSS. However, I have tried everything but I cannot get TurboTax to show the loss. Form 4797 shows the trade in value as a gain and forces me to pay taxes on this incorrect gain. What am I doing wrong? How can I get the program to properly reflect a loss?
Thanks for the reply! I traded in a vehicle and these figures represent the business portion of the transaction:
Selling Price $2287
Depreciation to date (derived from the standard mileage rates for each year) $3738
Original cost: $7388
Again, these figures represent the business portion for a 2011 Toyota Rav 4. The remainder of the transaction was related to personal use. I just cannot figure out how to get Turbotax to recognize a LOSS on the disposition of a vehicle used for business.
Thanks again so much for your help. I am using TurboTax 2018 desktop version. I enter the data on the step by step screens for Business Income and Expenses (vehicle section)
1. I answer the prompts and get a standard mileage deduction for 2018.
2. Then it goes on to the vehicle disposition section:
3. I enter the sales price (business portion) $2287
4. Next screen, I enter vehicle total cost: $7388
5. Then I enter basis for gain $3650 (cost $7388 less accumulated depreciation $3738)
6. Then I enter Prior Depreciation Equivalent $3738 (from the standard mileage rates 2011-2018)
7. The program always says I have a GAIN of $2287
Well, I did what you suggested and it still shows a gain of $2287 (equal to the sale price). For some reason, the program is not recognizing the accumulated depreciation. I appreciate your patience. If it's not too much trouble can you tell me the screen entries you are making to get to the loss? I won't keep bothering but it would be nice to know if it is a limitation of the TurboTax.
Thanks again.
I am having the exact same issue. No matter what I do, TurboTax keeps calculating a gain on my vehicle sale eventhough I'm sure it should be a loss. I even tried the suggestion from tagteam and, although the gain was much smaller, it STILL came up with a gain. It's very frustrating. In my case, based on mileage, the car was used 69% for business, got $7000 as a trade value (69% of $7000 = sale of $4830). Bought it for $28,000, reduced for depreciation using standard mileage reported over the last 5 years to an adjusted cost of $8759. When I take 69% of that, it's a cost of $6043 and a sale of $4830. How is that not a loss? It's really so frustrating. I have started to enter my data into a different product. I've wasted so much time on this now.