Since I don't have TurboTax Business, I'm not sure which entries are needed to defer the gain if you elect to do so. An election is needed and must be included with the return. I know individual desktop 1040 apps have it
Did you buy a replacement vehicle for $60K or more? If so, you can elect IRC 1033 to defer any gain.
This provision applies when an asset is converted into money or other property due to events outside the owner’s control, such as catastrophic damage or loss. It provides financial relief by allowing the taxpayer to replace the lost asset without an immediate tax liability. The tax deferral is not automatic. It requires strict adherence to specific IRS rules and procedural requirements set forth by the statute and subsequent Treasury Regulations.
The core requirement for deferring gain under this provision is that the replacement asset must be “similar or related in service or use” to the converted property. This standard applies to property lost due to casualty.
To achieve full tax deferral, the taxpayer must acquire replacement property that costs an amount equal to or greater than the net proceeds received from the conversion. Net proceeds are defined as the gross compensation minus expenses incurred to obtain the compensation, such as legal or appraiser costs.
The general replacement period for property lost due to casualty or theft is two years. This period starts from the close of the first taxable year in which any part of the gain is realized.
Realized gain is calculated by subtracting the taxpayer’s adjusted basis in the converted property from the net proceeds received. This calculation prevents the taxpayer from being taxed on proceeds representing the return of their original investment, or basis. The recognized gain is proceeds not used to acquire qualified replacement property and is taxed at the applicable capital gains rate based on the asset’s holding period.
Realized gain less recognized gain is the deferred gain that reduces the basis of the replacement property
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The gain should not be on Schedule K twice, only once on line 1 because of the gain on Form 4797 and not as other income. This is if you elect not to use iRC 1033.
What I think you did was to enter the disposition in the vehicle section and then again on Form 4684. If your not using Section 1033 then get rid of the 4684.
