Schedule C Car & Truck Expense - depr allowed is too large

[dhinschberger]

We used TurboTax 2018 last year.

In Apr 2018 we purchased a used car for my wife to use as a Real Estate Broker. Basis cost $13,200. The Section 179 from last year's return says

Depreciation and section 179 expense deduction $12,611

Form 4562 line 25 Special depreciation allowance for qualified listed property placed in service during the tax year and used more than 50% in a qualified business use $12,611

When we run the fix errors, it keeps telling for Schedule C that the deer allowed or allowable is too large. The box appears with 12,611 in it, but we can't edit the figures in the box. We're stuck and don't know what's going on.

[ThomasM125]

I would suggest you go back through the vehicle entry in TurboTax  and make sure you answered all of the questions correctly.

[dhinschberger]

We've gone back through the process 3-4 times, and the error continues. What I don't understand, is why the s/w gives you a box with a number in it, but won't allow you to edit the entry. And no where in the interview process is apparent to me where the s/w is getting that number, other than pulling it from the 2018 return...

[AmeliesUncle]

It is because your business percentage this year was lower, and based on the lower percentage, the "prior depreciation" is too large.

TurboTax is not set up well for assets that vary in business percentage.  You either need to know how to manually do the calculations and form, or go to a tax professional.

[ncummings]

I have a similar problem.  I simply answered the TT questions as they came up, and when I entered that I had sold a vehicle, it prompted me to enter what I paid for it 10 yrs ago and what I sold it for.  Then, voila, it tells me my line 51. Depreciation allowed or allowable is too large and line 52. AMT depreciation allowed or allowable (what's that??)...are both figures I cannot change.  

Please help us someone!  Thanks.

[DianeC958]

If you lowered the amount of business usage for the asset, that is usually when you receive this error message, because you have taken more depreciation than is allowed if the business usage is less than in previous years.  

If this is the case you would need to know how to calculate the amount of depreciation allowed due to the change in business usage.

AMT depreciation is a separate way to calculate the amount of depreciation you can take.  Under Alternative Minimum Tax (AMT)  the amount of depreciation you are allowed to deduct is lower.  You would use the AMT Depreciation if you have to recalculate the tax due on your return if you owe AMT tax.  In your tax return there is a separate depreciation schedule showing the amount of AMT depreciation that is allowed.

@ncummings 

[Semantax]

I deleted and re-entered the car. When re-entering the car TT calculated the depreciation as $5,062, which is much different than the $15,262 from line 36 (Prior Depreciation) of my 2018 “Car and Trucks Expense Worksheet”.  When I use $5,062 I do not get the "Depreciation cannot exceed business basis" error during the review, but when using $15,262 or match the full basis of $20k I get the error during the review.  Can I go with $5,062 even though it differs from what had been on my 2018 return?   

[AmeliesUncle]

@Semantax  

No.

Did you sell the vehicle?  As I said above, the program is not set up for selling vehicle that have varied in business percentage, and it can't be reported in the vehicle section.  You need to either MANUALLY calculate things and enter it in the "Sale of Business Property" section, or go to a tax professional this year.