In 2024 we put a vehicle into service for my spouse's business. It is used only over the summer for business purposes but in year one it was used so much it was over the 50% Sec 179 threshold so we took accelerated depreciation.
Fast forward to 2025 and unfortunately business use has dropped to 40%. Even though I'm not selling the vehicle and we plan to continue to use it for business use through its depreciable life, the new tax laws under OBBBA require me to take 179 depreciation recapture on my 2025 return
I've read some things about needing to use form 4797 for sale of an asset even though I haven't sold the vehicle, but not sure if it is automatically calculating the recapture for me or if there is something missing. Turbotax did acknowledge that there was recapture going on as there were a number of errors that popped in the federal error check. It's not jumping out in my depreciation forms and if I do the math it's just taking the original cost of the vehicle * business use % * 20% for a 5 year useful life. This takes care of ongoing depreciation, but not recapture.
Where am I supposed to go to take care of the recapture income? I can easily do the math on what I would have taken on a 5 year straight line basis versus the accelerated depreciation I took in year 1? Can always just drop that in as "other income"
(Don't worry - I'm already lowering my head in shame for being greedy and taking 179 in year 1 when there was no guarantee I could hold it).
