Report total loss and loan payoff of a business vehicle

[TJasion]

A 100% business use vehicle was totaled in an accident.

Using the Standard Mileage Deduction.

Insurance paid the balance of the financing on the vehicle.

Is the financing payoff an "expense of sale?" 

How do I record this in Turbo Tax? 

[Mike9241]

No it is ignored when figuring gain or loss.  gain or loss = cost less depreciation each year the standard mileage deduction has an depreciation per mile amount  IRS PUB 463 page 24

Rate of Depreciation Allowed in Standard Mileage Rate Year(s)	Depreciation Rate Per Mile
2021–2022	0.26
2020	0.27
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

[AmyC]

1. No, the IRS does not care about loans on the vehicle - it is not a selling expense.

2. In the business section, you will enter the sale of the asset. Before you start, you will want to figure out your deprecation totals while used as a business vehicle.

• If you used actual expenses - add up the amounts of depreciation from prior years.
• If you used standard mileage, multiply your business miles each year times the depreciation portion for that year and combine for a total.

3. Please follow the steps by @DianeW777 here for the "sale" of the vehicle that was totaled. You sold the car to the insurance company technically.

The annual depreciation amount per year included in the Standard Mileage  per IRS Publication 463 (Page 23) Car Expenses

• 2012 - $0.23
• 2013 - $0.23
• 2014 - $0.24
• 2015 - $0.22
• 2016 - $0.24
• 2017 - $0.25
• 2018 - $0.25
• 2019 - $0.26
• 2020 - $0.27
• 2021 - $0.26
• 2022 - $0.26