My car was totaled in 2024 and I bought a new vehicle with insurance proceeds to continue mixed business/personal use. The percentage of business use on the totaled car varied over 8 years, but averaged 30%. I used the standard mileage deduction and the implied depreciation was $3,000. The original cost basis for car was $21,100 and the insurance payment $16,400. So, for the 30% business use, the cost basis is $6330 and the insurance "sale" $4,920. That is a net loss, but does current tax law require a recapture of depreciation as ordinary income of $1,410 ($6,330 less $4,920)? And how is this input?
Going to Sale of Business Property seems to allow clean input, but the Business Vehicle Expense section does not. I have a red exclamation mark for the Car & Truck Expenses Worksheet. How do I resolve this?