If you used the standard mileage rate for the business use of your car, depreciation was included in the standard mileage rate.
Since depreciation accumulates, each year's business mileage affects the adjusted basis of the vehicle. The adjusted basis will, in turn, be used to determine the gain or loss when the vehicle is sold or disposed of, so keeping good records is essential.
See Business Use of Vehicles https://turbotax.intuit.com/tax-tools/tax-tips/Small-Business-Taxes/Business-Use-of-Vehicles/INF12071.html
If you used the standard mileage rate for the business use of your car, depreciation was included in the standard mileage rate.
Since depreciation accumulates, each year's business mileage affects the adjusted basis of the vehicle. The adjusted basis will, in turn, be used to determine the gain or loss when the vehicle is sold or disposed of, so keeping good records is essential.
See Business Use of Vehicles https://turbotax.intuit.com/tax-tools/tax-tips/Small-Business-Taxes/Business-Use-of-Vehicles/INF12071.html
Thank you for the quick reply. I used actual costs rather than standard mileage. How does that play out? Where do I find the previous years' depreciations? Do I add them together?
If you set up/entered the vehicle as an asset, you would use the Form 4562 Depreciation and Amortization Report and Form 4562 Alternative Minimum Tax Depreciation Report. I added screenshots to my answer. Note: these reports are not sent to the IRS so when you print them, they'll be part of general reports and schedules (not reports required for filing). If you don't have these reports, use the calculation in my answer.
Thanks!! I found the 4562 in my 2017 TurboTax. I can't add a screenshot, but it shows Basis for Depreciation of $5423, and Depreciation Deduction of $605. Is one of these the number that TurboTax 2018 is asking for Basis of Gain/Loss?
Yes, the basis for depreciation is $5,423. Question- but you bought it for $17,693? Is $5,423 the business portion? You'll have to deduct all the depreciation from 2013 to current.
I think the $605 is just for 2018 if I read the form right. So I would have to find the form for each year I suppose? My form shows the following:
Line 27
(b) Date placed in service: 09/10/2013
(c) Business use %: 30.65
(d) Cost or other basis: 17,693 (That was the purchase price)
(e) Basis for depreciation: 5,423
(f) Recovery period: 5.00
(g) Method/Convention: S/L-HY
(h) Depreciation deduction: $605
I appreciate your time and hope this helps you to help me.
No, Form 4562 has Prior Depreciation next to Current Depreciation. See my screenshots in my answer.
I appreciate it very much.... One last question, if I may: In 2018 TurboTax the item "Basis for gain/loss (Enter 100% of basis)" ... is that the $5423 or total prior depreciation ($3238 in my case)?
$5,423 less depr $3,238 so $2,185 is your adjusted basis. Question: TurboTax should be doing these calculations when you enter that you sold the vehicle in the asset section of the vehicle.
I would have thought so too. Maybe if I enter the 5423 as the 100% basis it will then do the calculations.
Well, I just plugged in various numbers and no matter what I plug in it returns a gain of $916. Not sure how I gained value on the sale though.