Capital Gains on Trading In Vehicle When Buying a New One

[CRS20]

I am an artist and I use my SUV for both personal use and part of my art business going to art showing, buying supplies, etc.   Based on mileage I have tracked over 8 years approximately 10% was used for art business and the rest personal.   I traded it in and I got $5,300 trade in value in December when I bought a new vehicle for $35k.   When completing my taxes thru Turbo Tax this year it indicates I should be claiming $5,300 as a capital gain which actually wipes out all of the mileage I took over the 8 years as a business expense.   Is this correct?  What am I missing?  Because it makes no sense to claim the mileage all those years if to then wipe it out when I trade in the vehicle for a new one.

[CRS20]

To someone who is going to reply:  If it makes any difference with my situation, the vehicle I traded in for $5,300 was bought 8 years ago for $28k in 2011.

[Anonymous]

the ability to defer gain on a like-kind exchange except for real estate has been eliminated 

so this is how the business gain works.     $5,300   times   total business miles divided by total miles

cost off vehicle allocated using the same formula

now each year you took the standard mileage deduction there was depreciation included in that mileage as follows

Rate of Depreciation Allowed in
Standard Mileage Rate
Year(s) Depreciation
Rate per Mile
2019 $0.26
2017–2018 0.25
2015–2016 0.24
2014 0.22
2012–2013 0.23
2011 0.22
2010 0.23
2008–2009 0.21
2007 0.19
2005–2006 0.17
2003–2004 0.16
2001–2002 0.15
2000 0.14

so you multiply the business mileage for each year by the rate for each year.  then total

cost prorated as above

less business depreciation as computed 

leaves tax basis of the business portion of the vehicle

$5,300 pro rated as above

less remaining tax basis = tax gain or loss.  

[CRS20]

Hackitoff,   I think I am following you but still not there.  This is what I have so far:

Orig Cost of vehicle traded in:  $26,681

Trade in value: $5,372

Total miles: 81,015   Pers miles: 76,049  Bus miles: 4,966 or 6.1% of total miles

Total depr based on your comments below: $1,165

This is where is gets fuzzy for me as I am not following what to do next....  :(

Are you saying I should take 6.1% of orig cost ($26,681) = $1,627 LESS depr $1,165 = $462 bus book value

Then 6.1% of trade in $5,372 = $329

Since $329 is less than $462 I claim a cap gain of $329

If this is NOT correct can you spell it out a bit more for me please.   Thank you so much!