Which year do I report "sale" of Self-employment work vehicle totaled in 2023, insurance reimbursement received in 2024?

[Traffic Jam Hater]

BACKGROUND:

2016-2023 - Used a vehicle for personal use and self-employment work.  Claimed standard mileage deduction each year.

Nov 2023 – Vehicle was totaled in collision.  Other driver was at fault.

Dec 2023 – Received notice from insurance company that they would reimburse me for value of vehicle.

Jan 2024 – Received insurance money as reimbursement for vehicle loss.

NOTE:

I used this vehicle for self-employment work from date of purchase until date of total loss (2016-2023).

I used the vehicle for personal and business use and kept track of the “work miles.”

I claimed the Standard Mileage Deduction on each year’s return.

I did not immediately replace the damaged vehicle; didn’t get another car until June 2024.

QUESTIONS:

1. Since I stopped using the vehicle due to total loss in 2023, and received insurance reimbursement, I must report this as a “sale” on my tax return, right?
2. If this does count as a “sale” for tax purposes, which return should I report it on….2023 (when I stopped using the vehicle due to total loss) or 2024 (when I actually received the insurance money)?
3. If the “sale” should be reported on my 2024 return—even though I stopped using the vehicle in 2023—how do I answer the “Did you stop using this vehicle” question on the 2023 return?
4. Regardless of which return I report the “sale of the vehicle” on, I will be required to calculate and enter the “business portion” of the “sale price.”  But do I have to report the remaining “personal portion” of the sale price elsewhere on the return?

Thanks!

[PatriciaV]

1. Yes, you must report that you stopped using this vehicle for your business. 

2. If you didn't report this on your 2023 tax return, you can report this on your 2024 return. 

3. Use 1/1/24 as the date you stopped using it. Enter no mileage for this vehicle.

4. The insurance proceeds are the "sales price" and TurboTax will figure any gain or loss for your business. Any personal gain or loss for the transaction is not reported on your tax return.