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Returning Member
posted Apr 13, 2023 9:46:26 AM

Help with Depreciation and Section 179 deduction

I'm helping a small business owner prepare his 2022 taxes and need help with how his business vehicle was previously depreciated. Vehicle was put in service April 2020. Cost was $16,300. For that year, the business use of the vehicle was 69% and he took a Section 179 deduction of $11,281. In 2021, it shows his business use was 36% and he took a depreciation deduction of $1,169 (it appears his preparer did not decrease his basis after the Sec. 179 deduction in 2020).  His business use of the vehicle for 2022 is 59%. What is the proper way to depreciate the rest of the cost from here?

0 1 179
1 Replies
Employee Tax Expert
Apr 16, 2023 1:41:59 PM

The easiest way to handle this situation is to enter the information into TurboTax and let the program calculate the depreciable basis. You will need to calculate the total depreciation that was taken so you can either confirm or adjust the accumulated (prior) depreciation that TurboTax calculates.

 

Once you have entered the vehicle for the business, report the current year business use and TurboTax will handle the rest.