I need to add two vehicles. The first was a loss. The second is one that I currently use and have a loan. I didn't include either when filing and now submitting an addendum. How do I figure basis for gain/loss for the first vehicle.

[JCampbellEA]

To figure out the basis for gain or loss on the first vehicle, you'll need to determine its adjusted basis.

Here's how you can do that:

1. **Original Cost**: Start with the original cost of the vehicle, which includes the purchase price and any other costs associated with acquiring the vehicle, like sales tax and registration fees.

2. **Adjustments to Basis**: Adjust the original cost by accounting for any improvements made to the vehicle that increased its value or extended its useful life. Also, reduce the basis by any depreciation you claimed while you used the vehicle for business purposes.

3. **Final Adjusted Basis**: The adjusted basis is the original cost plus improvements, minus any depreciation taken. Once you have the adjusted basis, you can determine the gain or loss by subtracting the adjusted basis from the amount you received from the sale or disposition of the vehicle. If the result is positive, it's a gain; if negative, it's a loss.

For the second vehicle, since you're currently using it and have a loan, you don't need to determine gain or loss unless you're disposing of it. If you need to calculate depreciation or other deductions, you'll use the vehicle's adjusted basis, which is similar to the steps above but without considering a sale or disposition.

[DawnC]

In most situations, the basis of an asset is its cost to you (the amount (in cash, debt, services and/or property) you paid including taxes and fees).   Are these business vehicles you are adding to your Schedule C?  

Before figuring gain or loss on a sale, exchange, or other disposition of property, or before figuring allowable depreciation, you must determine your adjusted basis in that property.    Certain events that occur during the period of your ownership may increase or decrease your basis, resulting in an "adjusted basis."   

Increase your basis by items such as the cost of improvements that add to the value of the property, and decrease it by items such as allowable depreciation (you have to include any depreciation that could have been taken even if you did not take it) and insurance reimbursements for casualty and theft losses.

Business Use of Vehicles

Depreciation of Business Assets

Depreciation Recapture: Definition, Calculation, and Examples