Solved: Gifted a car in 2014 used in my business, used the KBB for basis for depreciation. sold car in 2016 at a significant loss over the basis. Can I claim a loss on the sale?
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Gifted a car in 2014 used in my business, used the KBB for basis for depreciation. sold car in 2016 at a significant loss over the basis. Can I claim a loss on the sale?

I was gifted a car in 2014 used in my business from a great uncle who passed away, I used the KBB for basis for depreciation for the last couple years. Sold car in 2016 at a significant loss over the basis. Can I claim a loss on the sale?

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Alumni
Alumni

Gifted a car in 2014 used in my business, used the KBB for basis for depreciation. sold car in 2016 at a significant loss over the basis. Can I claim a loss on the sale?

Assuming you didn't just trade the car in, the answer is yes.  However, did you really have a loss? 

  • Your loss would be sales price minus cost.  Cost would be FMV at the time of death minus depreciation claimed in the two years you owned it.  Depreciation is claimed even if you used the mileage method.
  • Almost no car is 100% business use.  Any personal portion of the automobile would not be a deductible loss.

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Alumni
Alumni

Gifted a car in 2014 used in my business, used the KBB for basis for depreciation. sold car in 2016 at a significant loss over the basis. Can I claim a loss on the sale?

Assuming you didn't just trade the car in, the answer is yes.  However, did you really have a loss? 

  • Your loss would be sales price minus cost.  Cost would be FMV at the time of death minus depreciation claimed in the two years you owned it.  Depreciation is claimed even if you used the mileage method.
  • Almost no car is 100% business use.  Any personal portion of the automobile would not be a deductible loss.

View solution in original post

Level 9

Gifted a car in 2014 used in my business, used the KBB for basis for depreciation. sold car in 2016 at a significant loss over the basis. Can I claim a loss on the sale?

As a side note, TurboTax does not do these calculations well, so you will usually need to manually do a bunch of calculations.
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