Vehicle Basis Calculation After Taking Standard Mileage Rate

[vmarshall]

Vehicle was used for 2 partial years (previous and current) then sold mid-year.  Standard mileage rate was taken both years.  To determine the basis, Turbo Tax asks me purchase price/FMV and prior year depreciation.  I calculated the previous year's depreciation by multiplying the miles * the depreciation portion of the standard  mileage rate.  Then Turbo Tax calculates the current year depreciation but it's not doing the standard mileage rate calculation - it's using MACRS.  I can't figure out how to make it use the standard mileage depreciation calculation.  All suggestions appreciated.

[DianeW777]

The vehicle must be treated as follows and you already know how to calculate the depreciation portion of the standard mileage rate (SMR). It gets complicated with the different business miles each year and the standard mileage rate (SMR) versus actual depreciation. 

In the vehicle section simply check the box that it was converted to personal use. You will enter the sale using the steps for Sale of Business Property.

1. Total all of the business miles for the life of the vehicle
2. Total all miles on the vehicle for the life of the vehicle
3. Business miles divided by total miles = Business Use Percentage for the life of the vehicle
4. Take the original cost of the vehicle x the business use percentage = Business Cost
5. Take the sales or trade-in price x the business use percentage = Business Sales Price
6. Calculate all of the business miles by year with the rate in the SMR for depreciation (chart attached) to arrive at the total depreciation considered used by the IRS.

Next enter your Sale of Business Property

1. Income at the top
2. Scroll down to Other Business Situations
3. Select Sale of Business Property
4. Select Sales of business or rental property that you haven't already reported.
5. Answer 'Yes' to Do all of the following apply...?
6. Enter your sales information, do not make an entry for depreciation (no zeros)
   1.  Description of the Property (Vehicle made/model/year)
   2. Sales Price/Sales Expenses 
   3. Date acquired and date sold
   4. Cost
   5. Depreciation

                                            

[vmarshall]

Without taking the depreciation into account on the sale, it becomes a loss and gets deleted.  Then do I just following the listed property depreciation recapture process?  Thank you.

[RobertB4444]

Yes.  Since it was sold at a loss you probably won't have to recapture the full amount of depreciation.

@vmarshall