Trouble finding Prior Depreciation and Prior AMT Depreciation for Vehicle

[CherylHouston]

Where on my prior year's (or years') return do I find/figure the amounts for "Prior Depreciation" AND "Prior AMT Depreciation" for my vehicle which was bought new and put into service in 2015 for a 1099-NEC business.  I AM NOT using standard mileage deduction, but rather entering expenses.  A tax professional prepared my taxes last year, but every year prior I have used TurboTax for filing (if there is something to be learned from 2019 or prior years' taxes).  I've looked on Form 4562 and related schedules, but it is unclear to me which lines/columns to use. Help would be greatly appreciated.

[JillS56]

In the past have you claimed mileage deduction or actual expenses?   If you claimed mileage you add up the number of miles you drove on business and claim a deduction per mile.  Divide your specific vehicle type's cost number by 15,000, the average number of miles driven each year according to AAA. For example, if you drive a large sedan, divide 5,091 by 15,000 to get 0.3394. This tells you that your wear and tear cost is 33.94 cents per mile.   For cars an employee uses for business, the portion of the standard mileage rate treated as depreciation will be 26 cents per mile for 2021, down from 27 cents per mile in 2020.  To find the depreciation mileage rate for years before 2020 search the term "depreciation mileage rate (year).  To get the total amount of mileage depreciation you would need to go back to the year in which you started using the vehicle for business.

[CherylHouston]

Thank you, but as I mentioned I am NOT using the standard deduction but AM USING the actual expenses (and have every year that I owned the car).  What I am seeking is the amounts for "Prior Depreciation" and "Prior AMT Depreciation" related to the Vehicle itself, not a mileage rate.  Where can I find those amounts?

[PatriciaV]

If you used TurboTax in the past, the total AMT depreciation taken on the vehicle appears on the Alternative Minimum Tax Depreciation Report that is included with your complete tax return (Form 4562). The amount to enter is the total of current and prior depreciation shown on this worksheet, plus or minus any AMT adjustments. These are the last three columns on the depreciation report for this asset. You need only the report from last year, as the prior depreciation number is cumulative over the life of the asset.

Most other tax services provide a similar report. You may need to request this report from the service you used last year.

[CherylHouston]

@PatriciaV Unfortunately, I used a tax professional last year (2020) and they put zero as prior depreciation (which I am pretty sure is incorrect) on the "2020 Federal Alternative Tax Depreciation Schedule".  In addition, she did not put any amount in the last 5 columns ("Own Pct." through "59(E)(2) Amort") on that form, but she did put the same amount in "Amt Depr" and "Reg. Depr.".  I DID use Turbo Tax for tax years 2015-2019 (bought the vehicle new in 2015)--any way I can use those returns to come up with the correct amounts?  BTW, contacting the tax professional to get clarification is not a viable option. Thank you.

[AmyC]

Each time an asset is purchased, all information goes on the 4562, stating the purchase price, date placed in service, and method of depreciation. Then totals are carried over for following years. Since you have 2015-2019, you can determine the depreciation for those years by looking at 4562.

For 2020, you still have your required personal records so you can determine the depreciation and business use percentage. Your 2015 gives you the starting point.

References:

• About Form 4562, Depreciation and Amortization
• Publication 946, How to Depreciate Property

[CherylHouston]

@AmyC Thank you. Consulting my 2015-2019 returns helped me rebuild the prior depreciation and I am now confident about that number BUT I still don't know what the number should be for Prior AMT depreciation.  Note, there were never any adjustments shown on the Alternative Minimum Tax Depreciation Reports for previous years.  Does that mean that the answer to Prior AMT Depreciation is zero, the same amount as Prior Depreciation or some other number (if so, how would I figure that)?

[PatriciaV]

Please clarify if your 2019 TurboTax return includes depreciation reports for the next year. In the past, TurboTax included estimated depreciation for the next year with the current year return. This would provide your 2020 depreciation amounts. If you weren't subject to AMT, you may not have AMT depreciation reports.

[CherylHouston]

@PatriciaV My 2019 taxes generated an Alternative Minimum Tax Depreciation Report.  There is nothing in the "Adjustments Preferences Column" (on 2019 or any other year that I see).  In what column would I find amounts for the next year? While I do have both the Depreciation and Amortization Report AND the Alternative Minimum Tax Depreciation Report the only difference I see is an added column (Adjustments Preferences) on the 2nd report which contains all zeros.  So what should I fill in the Prior AMT Depreciation blank? Thanks for your help

[PatriciaV]

Are you subject to AMT this year? In other words, has TurboTax asked you about AMT preference items? If not, what you enter for AMT won't affect your return. If it looks like AMT depreciation was the same as regular, then enter the same for both.

If you have the Depreciation Report from 2019,  you should be able to look up the percentage for the next year (2020) in IRS Pub 946 Appendix A. You will need the Life and Method/Convention from the report, along with the date it was placed in service. 

Find the Life and Convention table (ex: vehicles are usually 5 year 200% Half-Year, which is Table A-1), then find row for the year you need. The percentage is the intersection of the Life column and Year row. Multiply this percentage by the Adjusted Basis and the Business Use Percentage.  See an example below.

2019 Honda Accord

In Service 7/1/2019 (half-year; 2021 = 3rd year)

Business Use 66.67%

Cost Less Section 179 Less Special Depreciation = $10,000

Life 5.0 years

Method/Convention 200DB/HY

Pub 946 Table A-1, 5-year, year 3 = 19.20%

Calculation:

Adj Cost x Table A-1 x Half-Year x Bus Use = 2021 Depr Exp

$10,000 x 19.20% x 1/2 year x 66.67% Bus Use = $640

[CherylHouston]

Thanks @PatriciaV and @AmyC Thank you both.  With both of your answers, I was able to research and get amounts for both blanks. Make it a great day.

[kob2]

I am having the same problem with determining the prior depreciation equivalent and AMT depreciation equivalent. I sold an older model vehicle (2011) in August of 2022 to a junk car place as it blew an engine gasket. The car's cost basis was $21,000 when originally purchased and sold for $450. I used a professional tax service for 2020 and 2021. The first year (2020) the calculation method was S/L-HY and depreciation deduction/"special allowance deduction" was $6,488 and the next year (2021) the calculation method was DB200HY for for a "current allowance deduction" of $4,904. Would I use DB200HY to calculate the current 2022 tax year's depreciation deduction? I add these three numbers up for the depreciation equivalent number? How would that apply to the AMT depreciation equivalent?