Car was a personal car that I started using for business on 1/22/15. Fair market value was $15,000. Car was sold 2/12/18 for $12,000.
Mileage & Amounts deducted:
2015 - 3184 miles, $1831
2016 - 3744 miles, $2022
2017 - 2959 miles, $1583
Total - 9887 miles, $5436
Steps:
1. "Lets verify the make and model of your business vehicle"
I checked the box for "I stopped using this vehicle in 2018" with date 2/12/18
2. "Do you own your car"
selected Yes, I own this vehicle
3. "Was this vehicle available for personal use in 2018?"
selected Yes, this vehicle was available for personal use. and Yes, I had another vehicle available for personal use.
4. "Let's get some info about how you tracked your business and personal miles in 2018"
selected Yes, I tracked my work miles. and Yes, I tracked my personal miles.
5. "How do you want to enter your mileage for your car?"
Enter total miles I drove for the year 2018, total miles for all purpose 8 miles and miles for business 6 miles.
6. "How many vehicles did you use for your business?"
selected 0-4 vehicles
7. selected No, I'll stick with standard mileage deduction.
8. No other expenses
9. "Do any of these apply to the car?
-You started using it as a personal vehicle 100% of the time at any point in 2018
-Your percentage of business use of the vehicle varied over the years
(should I check this box since the business use varied over the previous years but was always over 50% business use?)
(if i check this box, next step ask if I converted this asset to nonbusiness use, do I answer yes or no?) If i select yes, it ends here and brings me back. If I select no, It goes to the next step( step 10 below).
-You gave it away as a gift in 2018
-None of these.
Step 10. "Sales price"
Sales price (Business Portion Only) = ??
Expense of Sale (business portion only) = $0
(what is the business use percentage to calculate the business portion of the sale price since the business percentage varied over the years? pretty impossible for the percentage to be exact if its being calculated with miles. car was sold for $12,000)
(it say's 75% for business use on this page but I believe they say 75% because of the use for 2018. I tried entering $9,000 for sale price since that is 75% of $12,000. )
Step 11. " Vehicle Cost"
$15,000
Step 12. "Let's get the info on your gain or loss basis"
Basis for gain/loss (enter 100% of basis)
Basis for AMT gain/loss (enter 100% of basis)
Leave this part blank?
Step 13. "Calculate depreciation equivalent"
Prior Depreciation Equivalent = $2403
AMT Prior Depreciation Equivalent = $2403
(Previous years miles times the depreciation portion of the standard mileage amount to arrive at this number, $2403. Is it correct?)
Step 14. Say's my gain is $155 and that it is taxable income.
Done??
In step 9, If I checked box for "Your percentage of business use of the vehicle varied over the years" it would bring me to the next question "Did you convert this asset to nonbusiness use?" and if I answer yes, it says I must enter any recapture later under "Sale of Business Property".
I go to Sale of business property, check "A recapture of a previously taken section 179 or listed property deduction", next step ask if your business usage fall to 50% or less for the first time in 2018? answer no and it ends here, answer yes and next step is ask for "All depreciation plus section 179 deduction taken before 2018 on this property" and "depreciation recomputed on this property using the straight-line depreciation method". What do I put here? If I put $2403, next step says that I must include $2403 of listed property recapture income on my tax return. Do I even need to do this recapture since it business use didn't fall below 50%?
Thank You in advance for the help on this. I am just confused about a few of the steps.
