I have used my auto for small contracting business for less than 50% since 2012. I am going to go back to 100% personal usage. In turbo tax they ask if business usage fell below 50%. Since I have always been below 50%, do I need to recapture that depreciation and what line does it go on? I don't see anything (questions on TurboTax step by step) regarding this, but have seen it talked about in your community questions.
This is a requirement from the IRS that depreciation can be taken if the asset is used 50% or more for business.
Since this vehicle has never been used at least 50% then the recapture will need to be done, and TurboTax will walk you through this.
When I was adding my miles for 2017 (on a different vehicle), Turbo Tax asked me if I stopped using my car for business, sold it or gifted it. I said I stopped using it for business. Then it asked me if this was the first time business usage went below 50%. I said no. It has always been below 50%. Should I say yes?
I said no and then turbo tax said I was done and the car is not listed anymore. The car I used in 2017 is the only one left.
I do not see a Business Assets button after I click on Edit your Business and there is no Large Purchases button at all. I have never took depreciation for this vehicle. Thanks!
Okay, from your question, it sounded like you were trying to recapture depreciation. But, since you never took any there is nothing to recapture and it doesn't make any difference if you used your vehicle less than 50% for business. You still get to take the standard mileage expense deduction. You don't need to be in the asset/depreciation section at all, and you can delete that record.
You can go to the Business Vehicle Expense under Business Expenses and go through interview and see what your deduction is at the end. When you are adding your information about your vehicle you will see a box with the statement "I stopped using this vehicle in 2017." If you used your vehicle through the end of the year, then don't check it.
I know this is an old thread but I'm dealing with the exact same thing this year. I've never used my vehicle more than 50% for business. 15%-20% on average for the year. Last year I claimed mileage and it asked about my vehicle loan interest and dates I used the vehicle. I entered all of that and done. This year my business usage fell to 0% after March. I entered the date I stopped using it, my mileage up until that point for business and my interest again. Now it's telling me I need to go back to income and claim recapture of that depreciation. I've never depreciated it more than the small amount they add to mileage. Do I need to answer differently to avoid the recapture section?
@mntaxlady23800 I'm in a similar situation (had a personal vehicle that I always used less than 50% for business and only took standard mileage deduction, but closed my business at end of 2019 so converting vehicle to 100% personal use). How did you end up handling your situation?