Why do you show a gain of $920 when I bought the car for about $10,000 and sold it for $1,500?

[nelsonweine]

What details do you want to know?  I had the car for 14 years.

[Critter]

It is the depreciation recapture ... review the form 4797.

[TaxGuyBill · Accepted solution]

As Critter mentioned, any depreciation lowers your "Basis" (cost).  So it seems like over 14 years, you have claimed $9420 of depreciation, which lowers your Basis (cost) to $580.   Selling it for $1500 gives you a $920 gain.

*** Those numbers assume the vehicle is 100% business usage.  ***

If it was less than 100% business usage, the calculation are more complex *AND* TurboTax usually can not automatically calculate the proper gain/loss.  You would need to do the calculations manually or go to a tax professional.

As the previous paragraph indicates, if the business percentage varied since the car was first "placed in service", you need to do the calculations manually or go to a tax professional.

[Opus 17]

It doesn't have to have been 100% business use.  The standard mileage rate includes 22-24 cents per mile as a depreciation allowance.  If the car was driven for around 40,000 miles of business or work use, using the standard mileage rate, that would account for $9420 in depreciation.  

If you think you can calculate a depreciation figure that is more accurate than turbotax, you would have to change to the desktop program in order to make a manual correction on the form.

[TaxGuyBill]

My specific numbers were based on 100% business usage.  If it is reporting a gain of $920 with a business percentage of less than 100%, my numbers would be altered because TurboTax applies the CURRENT year business percentage to the sale.