Gain/Loss basis

[enfinitee]

I have read the other posts about this but is still confused on what to enter. Total cost of my car was $33k in 2015. When I started using my car for delivery business in 2023 it was worth $8375. I traded it in for a newer vehicle in 2025, trade in cost was $1300. Do not have any allowable depreciation on previous tax returns so what will my basis for gain/loss be? What will my basis for AMT gain/loss be? I used my vehicle 52.02% for business. 

[Opus 17]

Did you use the standard mileage rate or actual depreciation, and how many business miles did you claim? Or how much actual depreciation did you claim?

[enfinitee]

I used the standard mileage rate and claimed 12009 business miles. Previous returns I filed a schedule C if that matters. 

[Opus 17 · Accepted solution]

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@enfinitee wrote:

I used the standard mileage rate and claimed 12009 business miles. Previous returns I filed a schedule C if that matters. 

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The standard mileage rate includes depreciation.  The amount varies from year to year.  There is a table here.

https://bradfordtaxinstitute.com/Free_Resources/IRS-Mileage-Rates.xml.aspx

To figure out the exact amount of depreciation you claimed, use the mileage and the depreciation rate for each year.  (For example, 3000 miles x 28 cents/mile for 2023, 5000 miles x 30 cents/mile for 2024, or whatever.)

Your adjusted cost basis is your original cost minus the depreciation you claimed.  That's going to be well over the $1300 trade-in value so I don't think you have any gains to report.  However, the calculation is slightly different when it comes to business use of personal vehicles because of the mixed use, and I'm not knowledgable about that calculation.  You should have listed the car in Turbotax on your schedule C as part of the business.  You can then report the trade-in in Turbotax and it should ask about your prior mileage deduction and take you through the calculation.  (There should be a question like "do you still use this vehicle for buisness?" that will take you to an interview about trade-in and so on.)  If not, you can ask here for more advice and I will find someone who knows more about this calculations.

@AmeliesUncle 

@rjs 

[AmeliesUncle]

If your business percentage varied from year to year, unfortunately, TurboTax does not support that situation.

Entering the sale in the vehicle section is problematic because it assumes your current-year business percentage is the average percentage of its entire life, which is almost never the case.   Unless you really know how to manipulate the numbers, it will give an incorrect gain/loss.

Manually calculating and entering the sale in the "Sale of Business Property" section can result in the correct gain/loss, but the last I checked it does NOT correctly affect things like QBI, the Home Office limit and some other things.