How to complete "Vehicle Expenses" related to a sold business when the same vehicle continues to be used for another business?

[RayeL]

I have used 1 vehicle for 2 businesses (Business "A" & Business "B"). I sold Business "A". I continue to use the vehicle for Business "B".

I own the vehicle. It was (and is) available for personal use. I had another vehicle available for personal use. I tracked work miles for both businesses and tracked personal miles for the vehicle. I always took the standard mileage deduction for both businesses.

The year-on-year average percentages of business use and personal use varied a small amount. The average for Business "A" is about 6%

Under "Vehicle Expenses" for Business "A" I checked box "I stopped using this vehicle in 2024. And entered the date that Business "A" was sold.

Is the correct way to record it as no longer being used for Business "A" to select "You started using it as a personal vehicle 100% of the time at any point in 2024"? And the "Yes" on the "Conversion to nonbusiness use" screen?

I appreciate all replies!

[KrisD15 · Accepted solution]

Yes, since you did not sell the vehicle, you'll tell TurboTax that it was converted to personal use. the percentage of business to personal does not matter at this point. 

When you DO sell the vehicle, you may need to deal with depreciation recapture. 

When you use the Standard Mileage Rate, there is a "Depreciation Equivalent" in each mile. 

You determine the depreciation taken by both businesses and use that if you need to compute depreciation recapture. 

At the time you sell, you'll also need to average the business use including when it was used for company A.

Example, you averaged 20% business use for Company A and 30% for company B so 25% business use.

The basis was 20,000, you took 5,000 depreciation so the adjusted basis is 15,000.

If you sell it for more than 15,000, (up to 20,000) 25% of the profit will be deprecation recapture. 

[RayeL]

@KrisD15 - Thanks for the reply.

Is the correct procedure in TurboTax to leave the "A recapture of a previously taken section 179 or listed property deduction" box checked and click NO on the "Section 179 and Listed Property Recapture" screen?

Or uncheck the "A recapture of a previously taken section 179 or listed property deduction" box and check "None of the above" box instead?

Like this:

Or like this:

Thanks!

[KrisD15 · Accepted solution]

In your case, since you did not sell it, select only "None of the above"

You won't be claiming any kind of income or gain, you are just getting it off the books for Business A which you no longer own.