My husband is self-employed and files a Schedule C. He purchased a car in 2015 that is used for business purposes. The business use during the first 7 years was between 75-85%. For the last 3 years, the usage is 58-64%.
TurboTax Home & Business is calculating depreciation on line 35 of the Car and Truck Expenses Worksheet. However, there is no depreciation deduction on line 38, 40, or 82(m) on the same form. Nor is there auto depreciation on Sch C, line 13, or Form 4562 line 26 (d-h)
On the Depreciation and Amortization Report, the only information listed for the car is the Code, Date in Service, and Bus Use %. The Code is L, whereas it had been A for all the previous years.
I've answered all the questions about the car the same as in previous years.
On page 61 of Publication 946 under Deductions After the Recovery Period:
If the depreciation deductions for your automobile are reduced under the passenger automobile limits, you will have unrecovered basis in your automobile at the end of the recovery period. If you continue to use the automobile for business, you can deduct that unrecovered basis after the recovery period ends. You can claim a depreciation deduction in each succeeding tax year until you recover your full basis in the car. The maximum amount you can deduct each year is determined by the date you placed the car in service and your business/investment-use percentage.
I have not depreciated in excess of the Unrecovered Basis. If I consider the average business usage, it seems like I should be able to deduct depreciation the next 2 years If I apply current year business usage to the Unrecovered Basis, the current year depreciation would be limited, but more than 0.
Thank you.
