Rental properties - disposition of vehicle - how to report in Turbo tax.

[justine626]

I used my personal vehicle that I bought in 2022 for my 2 rental properties for 2022, 2023, 2024 year - taking standard mileage for each.
On 10/2024 my car totaled and I had to dispose it. I got paid 500 from the junk yard but all the cost to get it from the impound was >500 so overall sales is 0.

- Do I report the disposition under Rental Properties and Royalties on one of the rental property only in schedule E and fill out the Car and Trust Expenses Worksheet for 1 property or do I need to fill that out for both properties? Or do I report it under Business Items - Sales of Business Property section?

-I add up the business use for the 3 years for the 2 properties / total miles use is 74.19%.
basis cost (4800 x business use%) - $3561

Turbo tax flagged to fill out 2 Car & Trust worksheet, one for each properties. Not sure how to report this.

Under Prior depreciation - it said AMT prior depreciation cannot exceed $4800 (cost of the car). I entered $6848 which is the depreciation taken for the 3 years for both properties.

Also need help to fill out the worksheet. It asked for the following:

Gain Loss basis - (business cost % x purchase price)  $3561

MACRS convention
Recovery period
Depreciation allowed or allowable
AMT Depreciation allowed or allowable
Prior depreciation

Thank you.

[AmeliesUncle]

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@justine626 wrote:

- Do I report the disposition under Rental Properties and Royalties on one of the rental property only in schedule E and fill out the Car and Trust Expenses Worksheet for 1 property or do I need to fill that out for both properties? Or do I report it under Business Items - Sales of Business Property section?

I entered $6848 which is the depreciation taken for the 3 years for both properties.

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In the rental section, say you converted the vehicle to personal use.  Do that for both properties.  Then enter the sale in the Sale of Business Property section, using your manually calculated numbers.

How did you calculate $6848?  I don't know the details of your situation, but at first glance that seems extremely high.

[justine626]

Thank you so much @AmeliesUncle 

Following your advise I select to convert the car to personal use 100% and and Yes for "Conversion to nonbusiness" use in 2024 for both properties.

I recalculated the depreciation taken with below steps:

$5064
2024 business miles x .30
2023 business miles x .28
2022 business miles taken x .26

Total miles - 32780
Total Business miles - 18370
busines use% - 18370/32780 = 56.04%

Reported the disposal under - Sales of Business or Rental Property

Date acquired 07/2022
Date sold 12/2024
Total sales (sales x business use% = 303
Total cost of property (Tax Basis) plus expense for sales - (4800+3500+500*56.04%) = $4931
Depreciation taken on this property = $5064

Going through the wizard from "Sales of Business or Rental Property - there's a section "Section 179 and Listed Property Recapture" - should I say No as I didn't report as Section 179?

If I select YES, it ask me for "All Depreciation Plus section 179 Deduction taken before 2024 on this Property" and Deprecation recomputed using straightline.

Also looks like even if I fill out as per your suggestion, I'm still stuck having to fill the Car & Truck Expenses Worksheet one for both rental properties.

Each  rental property - Total Car & Truck Expenses worksheet - don't know how to fill the following:
Prior Depreciation ??
AMT prior Depreciation ??
MACRS convention ??
Recovery period ??

- Sales of Business Property Subject to Recapture of Ordinary Income Smart Worksheet -have questions on the following to fill out:

Depreciation allowed or allowable - $5064 (Upon running Federal check it said Line 22 should be less than or equal to cost or other basis plus expense of sales. Should I enter $4931 here?)
Selling price including mortgages and other debts. - $$$ should I enter $303 ?
Prior depreciation ??

AMT prior depreciation ??
MACRS convention  ??
Recovery period  ??

[AmeliesUncle]

Your method of calculating depreciation is correct, but the number of business/rental miles is unusually high for only two rentals (roughly 73 miles per week, per rental).  But as I said before, I don't know the details of your situation.

Your business percentage that you mentioned in your comment changed quite a bit from your original post.  I assume your second percentage is the correct percentage?

Correct, say "no" to the 179 question.

Yes, because you used the vehicle in 2024, you need to report the 2024 miles.  However, if you are using the Standard Mileage Rate and you say you are converting it to personal use, it shouldn't be asking for all of that stuff.  

Yes, enter $4931 (the depreciation amount UP TO the original Basis).

Yes, enter $303 for the selling expenses.

Is it asking for all of that depreciation information in the Sale of Business Property section?  It shouldn't need to know that, and it didn't used to ask for that, unless you are entering a different section or if they changed the program recently.