Bought a new car in May 2022 and sold in Dec 2022, used it for both personal and business purposes.

[drmani]

I bought a new Highlander in May 2022 and drove for both personal and business purposes. I traded in the vehicle for another Highlander in Dec 2022. Total miles were driven for all purposes 6,097. I used approximately 3000 + miles for business. I chose a standard mileage deduction of $1XXX. I added tolls used and interest paid during that period.

I bought the car for $47,159 (May 2022) and the trade-in Value is $40,300 (Dec 2022), and bought another vehicle for $45,009.76 (Dec 2022). 

What should I include under the sales price?

Vehicle Cost Price?

Basis for gain/loss?

Basis for AMT gain/loss?

please help me with this.

[AliciaP1]

In your example, the Vehicle Cost is $47,159 x your business use percentage (figured by your mileage).  The Basis for Gain/Loss (and AMT Basis) will be the same amount as Cost as long as you started using the vehicle for business in May.

[drmani]

@AliciaP1 Thank you so much for your response.

Based on the information you provided. 

Sales Price (Business portion only) - 13,535 (28.70% Showing in TurboTax)

The expense of Sale - $0

Vehicle Total Cost - $47,159

Basis for gain/loss - $47,159

Basis for ATM gain/loss - $47,159

final result - showing Gain on sale - $780.

I did not understand this, I bought the car for $47,159 and sold it for $40,330.  I took the loss of $6,829. but the TurboTax is saying that there is a gain on the sale. Can you please elaborate? did I enter correctly?

[drmani]

Anyone, please help me with this?

[AliciaP1]

Since you traded the vehicle in, you need to list the sales price as the adjusted basis of the old Highlander.  The new Highlander's value will be the basis of the old Highlander plus the additional cash paid (or loan amount) to purchase it.  

So, since you are using the standard mileage deduction you need to use this chart to determine the depreciation you are reporting and subtract that from the business portion of the purchase price.  If you are claiming 3000 miles the depreciation from the chart is $780.  So your business basis in December in the old Highlander is $13, 527 and this is the amount you should use for the sales price of it.

The new Highlander's business portion of the basis will be $13, 527 + $4,710 (the amount over the trade-in you paid).

@drmani